Hit Nottingham City Council provides update on £1.2bn debt reduction

Nottingham City Council said it had successfully reduced its £1.2billion debt by more than £200million. The Labor-led authority can no longer voluntarily borrow money after the collapse of Robin Hood Energy and must instead seek to raise money through other means such as the sale of valuable assets.

In 2018, the City Council was said to have hit an “all-time high” in debt, at £791million, and that would pass the £1billion mark. At the time, councilor Graham Chapman, then deputy leader of the council who represents Aspley, said the authority would be irresponsible not to invest and as such had borrowed in order to make investments profitable.

However, this came to a head during the administration of his bankrupt energy company, in which millions of taxpayers’ money had been invested irresponsibly, and by law the council must now reduce these levels of energy. indebtedness and was prevented from borrowing more. This progress in balancing its books and reducing debt by selling assets and securing government grants is being scrutinized by an independent improvement board.

Read more: Concerns raised as council plans £93m asset sales

This council reports to the government on the progress of the council. And, at a meeting of the oversight committee on Wednesday June 8, the board said its debt had been significantly reduced.

Councilor Labor leader and Dales Ward Councilor David Mellen said: “We are in an unusual situation compared to other councils because we are in a situation where, due to advice from our council for improvement and d insurance, we are not in a position where we can borrow money and we are in a situation where we want to reduce the amount of borrowings we have made.

“And we’ve done that successfully over the last two years. We’ve reduced the council’s debt by over £250m. That means the cost of servicing that debt is lower.”

Because it can no longer easily borrow to meet expectations, the council must now apply for government grants and sell property and land. He hopes to raise more than £93million from the sale of assets, but some of these include valuable community assets and the sale of these has raised serious concerns.

Despite these fears, Councilor Mellen said debt service has also been reduced by around £200million a year. According to the board, the improvement board has so far been “pleased” with its progress, meaning the commissioner’s intervention is not as present.

About Janet Young

Check Also

Red flags on FTX that we all seemed to miss

Sam Bankman-Fried has managed to seduce much of the crypto world. Now comes the next …