A council in Nottinghamshire which declared effective bankruptcy a fortnight ago has proposed job cuts and reductions to library services as it scrambles to balance its budget for next year.

The Labour-run Nottingham City Council has suggested 500 full-time positions at the authority could go with “every effort” made to limit job losses to voluntary redundancy.

The figure is roughly 8 per cent of its 6,000 employees.

In a report to the Council’s Executive Board ahead of a meeting on 19th December, financial officers recommend savings worth £50million for next year’s budget by increasing council tax by the maximum amount of 4.99 per cent, reducing bus services to the lowest statutory level, and ending school uniform support for children.

Nottingham City Council has blamed its financial woes on a “failure” of national Government to fund local authorities.

Leader of Nottingham City Council, Cllr David Mellen, said: “As things stand, unfortunately the budget pressures we are seeing are unlikely to reduce next year and like many councils, we are facing a serious gap in our budget for 2024/25.”

“This means officers have had to put forward proposals for significant savings and service reductions which no-one would want to make but have to be considered by councillors if the council is to meet its legal requirement to set a balanced budget.”

The authority issued an S114 notice on 29th November when its Chief Financial Officer determined the council could not balance its budget for the current year with a £23million void.

Nottingham City Council issued an S114 notice at the end of November

It must now stop all new spending aside from statutory services.

Nottingham City Council says it's had £97million stripped from its Revenue Support Grant every year by the Government since 2013/14.

“...we are all in this position due to the continued underfunding of local government over many years and the huge increases we are seeing in demand for services as a result of the national cost of living and housing crises," said Cllr Mellen.

A public consultation on the measures will be held ahead of the budget being finalised for 2024-25.

Nottingham City Council says it's had £97million stripped from its Revenue Support Grant every year by the Government since 2013/14

Nottingham City Council's financial trouble stems from failed energy firm Robin Hood Energy which cost the city £38million. The misspending of housing funds cost another £51million.

The depleted finances contributed to the authority's current position. The Government's Improvement and Assurances Board has been monitoring the Council's spending since 2022.

The Local Government Association says one in five councils in England are considering issuing an S114 bankruptcy notice this year due to lack of funding. It estimates a £4billion gap in funding in England across the next 2 years.

“While councils have worked hard to reduce costs, find efficiencies and transform services, the easy savings have long since gone. The Government urgently needs to act to address the acute financial challenges faced by councils,” said Cllr Shaun Davies, LGA Chair.