‘What does Labour’s fairer funding actually look like for councils like Nottingham?’

Since 2010, council funding has suffered cuts, with poorer councils suffering worst and, perversely, the poorer the population the more you lost.

By 2022, in real terms, Nottingham City Council lost £130m in grant from the Government, with the Tories taking away £922 from the pockets of every household in the city.

Faced with less funding and more demand, Nottingham City Council, like councils across the country, has had to sustain services to keep the lights on.

During that time the Council, under Labour leadership, has been at the forefront of resistance to this deliberate injustice. Through lobbying organisations, and independently, it has pointed out the unfairness in the distorted mechanisms the last Government used to create a situation where places like Wokingham, the richest council area in the country, actually gained.

Under Labour, things have changed

Under the last Government the lobbying fell on deaf ears. Under Labour, things have changed. Last year all the councils which faced the brunt of the cuts received a one off boost to their funding, in Nottingham’s case this was to the value of around £35m. This year funding will be consolidated, and possibly improved, by an overhaul of the grant system based on fairness not politics.

Nottingham is the 11th most deprived authority in the country, and last year we received the 11th biggest settlement from the government. That is what fairer funding under Labour looks like.

Not a Labour Government bailing out Labour councils, but correcting the injustices that Rishi Sunak boasted about.

The effect of fairer funding at Nottingham City Council will allow us to plan our budget better. Supporting the Council to balance its books, to respond to some of the increased demand in care services but also, slowly, to restore some of the services taken away under the Conservatives.

This Government listens to our lobbying, in stark contrast to the last one, and are putting right the wrongs inflicted on cities like Nottingham.

As councillors, who have spent years being forced by the last Government to do little more than manage the decline of our city, we have worked hard to get to this position. Where we and the people of this city are finally seeing some early reward for our persistence, patience and sacrifice.

Austerity hits, and it hits cities like Nottingham hardest.

Cities are your growth centres, your innovation and skills hubs, your economic powerhouses and your jobs and wealth creators. Tory policy starved them, labour policy will enrich them. To accelerate this enrichment we have, and will continue to, lobby alongside our Core Cities partners, such as Liverpool, Manchester, Birmingham and Leeds.

That’s why the country feels like everything is broken

So what steps are we as a Council taking to secure sustainable funding for the city and it’s finances? We’re working with the new Labour Government and we’re getting our house in order. And what do we mean when we say that?

This Council has had its own challenges, and we have owned our mistakes. We have also been ravaged by 15 years of austerity, with councils across the country subjected to a national rampage in local government funding, recklessly shaking to the core the foundations of public services.

That’s why the country feels like everything is broken. And with the Labour Government’s help, it has fallen to Labour councillors to clean up the last Government’s mess in our own councils.

As the financial situation for Nottingham City Council improves, we’re becoming a renewed council that emerges stronger from the abyss of Tory austerity. A renewed council, that delivers for local people and leads Nottingham forward.

We balanced the 2024/2025 budget with £41m of Exceptional Financial support, not a penny from Government, but permission to sell our assets to balance the books. The final outturn shows that in the end, from the £41m we only needed £7m.

Pressures remain and our financial situation continues to be challenging but things are looking more hopeful, a little less bleak. That isn’t to say the view in front of us is rosy, but it is to say we are not bankrupt, we have never been bankrupt and we are nowhere close to being bankrupt.

As a council we get a lot of undue criticism for our debt, but since 2021 we haven’t borrowed a penny. We imposed a voluntary borrowing cap with our debt at £941m. To date, we have reduced that to £746m, a 20% reduction of £195m, and we plan to continue reducing our debt by £30m to £50m each year for the coming years.

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Council debt is not household debt. We have not borrowed to pay for day-to-day shopping, we’ve borrowed to pay for things like our tram, our highways, our parks, our housing, the critical infrastructure a city like ours needs. Nottingham Labour has always been ambitious for our city, but ambition without the means to deliver it is nothing more than wishful thinking. And we are not an outlier, every core city, like us, borrows for these schemes because we choose to invest in our people.

As we look ahead to setting the Council’s budget for 2026/2027, we’re doing so in the knowledge that if it weren’t for the Labour Government’s fairer funding we would be in a very bleak place, and we wouldn’t be alone.

More councils are heading towards 114 notices and having commissioners appointed. Invariably, it has very little to do with the local mistakes councils make, and a lot to do with the fact they’ve had their coffers depleted by a decade of unfair funding.

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