Why is our City broke?

Like most people in West Bridgford, I use Nottingham city centre for leisure, shopping and public transport and I want it to thrive. So it’s been very sad to pass the Broadmarsh hoardings for the last 4 years, and to see the City in financial difficulties.

In my opinion, local government is in a mess. Why does the City have two layers of local government (Nottingham City Council and the East Midlands Mayor from Thursday), whereas Ruddington has four (Parish Council, Rushcliffe Borough Council, Nottinghamshire County Council and the East Midlands Mayor)? If you look at a map of the City you might ask.. why isn’t Clifton in Rushcliffe? It certainly feels like someone was gerrymandering when that arrangement was established, and even that wasn’t the case, it doesn’t make for very representative communities in both council areas.

Put simply, Nottingham City Council is a small authority, with a relatively transient and lower income population, and responsibility for everything that the County, Borough, and Parishes do for those of us in Rushcliffe. Meanwhile residents from outside the City make use its resources, from events and swimming pools to buses and trams.

So what’s gone wrong? This is what I understand from the knowledge I have gained as a councillor.

First, the City Council hasn’t enough money coming in for what it is expected to do. Council tax is very low in the City. As I wrote last year, Rushcliffe likes to pretend it has a low council tax rate, but that is simply not true. Our headline “Band D rate” is indeed low, but 46% of houses in Rushcliffe are band D or above (paying high tax), whilst 91% of houses in the City are band C or below (paying low tax), so the council tax per household (which is what we care about as residents) is about 30% lower in the City*.

Added to this, the City’s Revenue Support Grant has been drastically cut since 2010. Remember Sunak boasting that he had taken money from deprived areas to give it to wealthy towns? Well he wasnt lying: the Tories have taken £100m from the City in 10 years.

We all know that if you are short of money you cannot invest in things that will save money in the long run.

Next, the City Council has been very unlucky. Intu was a private company that went bust after it had started to demolish the Broadmarsh shopping centre. This left the City to pick up the pieces, and without the money from the rates it previously got from the Broadmarsh shops. No one wants developers throwing up a cheap, bog standard mall there; many people in Rushcliffe want a landmark development reflecting our joint environmental ambitions of which the whole area can all be proud. Shockingly the government have not given any levelling up funding to sort this out.

Similarly the Castle was in need of repair but as a council the City couldn’t raise the money needed, so they handed it over to an independent charitable trust (one councillor on a board of about 20 as I understand it). The trust got their pricing structure wrong for Nottingham, and so with too few visitors the Trust collapsed after a year, again walking away leaving the City to pick up the mess. Now the City are running the Castle and visitor numbers are recovering .

We all have bad luck, but if we are rich we can usually weather the storm whereas if we are poor it can destroy us.

Finally of course there were some bad decisions. In 2015 the government wanted to diversify the energy market and encouraged many new small suppliers. The City was widely praised for establishing Robin Hood Energy as a not for profit supplier. It was rated second best for customer service by Which magazine in 2019, but it failed to encourage people to switch quickly enough. Robin Hood energy survived when many of the new suppliers went bust in 2018 but eventually succumbed in 2019, with debts of £38m which were then passed back to the City. Of course almost all the new small energy suppliers have now disappeared, and the government bailed out Bulb energy with billions of tax payers money.

We all make mistakes but if we are rich we often have the resources to work things out, whereas if we are poor mistakes can be devastating.

Ultimately the City does not have enough income to fund the services it is legally required to provide, making it highly vulnerable to any problems that come its way. Council leaders in neighbouring authorities should be less keen to crow and instead remember that ‘there but for the grace of God go I’.

*Calculated using the government data on council tax receipts and council tax base (number of chargeable properties)- Rushcliffe collects the council tax for the County so these figures are covering the same services.