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Nottingham City Council has declared itself effectively bankrupt after issuing a section 114 notice.

The Labour-run local authority confirmed the announcement on Wednesday, saying its chief financial officer had decided it “isn’t able to deliver a balanced budget for this year, which is a legal requirement”.

As a result of the section 114 notice, all new spending – with the exception of protecting vulnerable people and statutory services – must stop immediately.

It becomes the second local authority this year to fail financially, after Birmingham City Council issued its own 114 notice back in September.

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The council has come under financial pressures after its attempt to enter the power market with Robin Hood Energy (RHE) failed in 2020, losing the authority millions.

It later got into trouble after spending millions of pounds ring-fenced for local housing as part of its general budget.

But the authority was also hit hard by changes to central government funding under the coalition government back in 2013/14, as well as soaring inflation and growing demand for social care.

The Department for Levelling Up decided against bringing in a commissioner after the failure of RHE three years ago, but gave an advisory board more powers to ensure the council adhered to their advice – with the threat of the final option hanging over their heads if their financial performance didn’t improve.

But now the section 114 has been issued, commissioners will likely be brought in to take charge.

A statement from Nottingham City Council said its executive board met last week to discuss a report into its latest financial position, as rumours swirled the authority was on the brink of bankruptcy.

Local or national government – who is to blame for struggling councils?


Sam Coates

Sam Coates

Deputy political editor

@SamCoatesSky

There is only one real political question about Nottingham City Council: Who shoulders more of the blame for running out of money – central government or the local politicians themselves?

Council budgets have been squeezed ever since George Osborne became chancellor in 2010: seen as an easy target for a Treasury hunting for savings.

According to the Local Government Association, since 2010 there has been a 27% real-terms cut in core spending power.

Given the spending pressures from inflation, particularly on social care, councils everywhere are suffering.

That said, of the 113 local councils in England, only 13 councils have issued section 114 notices – the action a local authority must take when it is about to spend more than their income. Birmingham was the last council to make the order in September, with Woking, Thurrock and Croydon before that.

Research by the Institute for Government found there is no correlation between the party that has political control of an authority and the likelihood of issuing a section 114 notice.

However, the government is very keen to make this a partisan issue, since Nottingham is a Labour council, and has been since 1998 – with not a single Conservative in the council chamber.

The council themselves blamed children’s and adults’ social care, rising homelessness and the impact of inflation, and claimed the “funding model” is broken.

However, the saga of “Robin Hood Energy” left a big dent in both the accounts and their credibility.

This scheme was established in 2015, set up to help people struggling with rising bills, and was heralded by Jeremy Corbyn when he was leader of the Labour Party – however it was unable to pay its bills, and ultimately closed, costing taxpayers £38m.

A damning report by an external auditor found the council was guilty of “institutional blindness” over RHE, prioritising political objectives over reality.

It found the council did not know the scale of the risk they had taken on and criticised the culture at the council, the reporting process and the way the company was handled, as well as the lack of accountability.

Hubris or well-intentioned but misguided, the council is still paying the price.

Whether the public draws political lessons remains to be seen.

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It said the report highlighted that “a significant gap remains in the authority’s budget, due to issues affecting councils across the country, including an increased demand for children’s and adult social care, rising homelessness presentations and the impact of inflation”. 

But, it added: “Past issues relating to financial governance… and an overspend in the last financial year have also impacted on the council’s financial resilience and ability to draw on reserves.”

Leader of Nottingham City Council David Mellen told Sky News. “We are going to be paying our staff. We are just saying in this financial year we’ll be overspending against our budget.

“For 13 years we have been underfunded, pressures on us from services are difficult.

“Many other councils are struggling – we are not the first, we won’t be the last. We are not incompetent – the government has not funded us properly.

“We have lost £100m in our budget every year for the past 10 years.”

All of the city’s councillors will now have to hold a meeting in the next three weeks to discuss the ongoing issues.

But Nottingham City Council said both senior officers and its members “remain committed” to working with the government and its advisers to “put the council on a stable financial footing for the future”.

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However, Nottinghamshire MP and government minister Robert Jenrick attacked the Labour leadership at the council, saying they had “proven themselves utterly unfit to govern this great city”.

He added: “Their breathtaking waste and incompetence have let residents down for long enough. It’s time for the secretary of state to appoint commissioners to restore order.”

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Starmer urges anyone with information on Epstein case to come forward – after Andrew misses Congress deadline

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Starmer urges anyone with information on Epstein case to come forward - after Andrew misses Congress deadline

Sir Keir Starmer has urged anyone with information on the Jeffrey Epstein case to come forward after Andrew Mountbatten Windsor missed the deadline to appear in front of US Congress.

US legislators have criticised Andrew for what they describe as “silence” amid their probe into Epstein after he failed to respond to their request for an interview.

When asked about Andrew missing the deadline and whether the former prince should help the case in any way he can, Sir Keir said on his way to the G20 summit in South Africa: “I don’t comment on this particular case.”

He added that “a general principle I’ve held for a very long time is that anybody who has got relevant information in relation to these kind of cases should give that evidence to those that need it”.

Andrew is not legally obliged to talk to Congress and has always vigorously denied any wrongdoing.

More on Andrew Mountbatten Windsor

Sir Keir Starmer spoke to reporters on his way to the G20 in South Africa. Pic: Reuters
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Sir Keir Starmer spoke to reporters on his way to the G20 in South Africa. Pic: Reuters

It comes as Marjorie Taylor Greene, a loyal supporter-turned-critic of US President Donald Trump, said on Friday she is resigning from Congress in January.

Ms Greene’s resignation followed a public falling-out with Mr Trump in recent months, as the congresswoman criticised him for his stance on files related to Epstein, as well as on foreign policy and healthcare.

Members of the House Oversight Committee had requested a “transcribed interview” with Andrew in connection with his “long-standing friendship” with Epstein, the paedophile financier who took his own life in a New York prison in 2019 while awaiting trial on sex trafficking and conspiracy charges.

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Releasing the Epstein files: How we got here

But after saying they had not heard back, Democrats Robert Garcia and Suhas Subramanyam accused Andrew of hiding.

Their statement read: “Andrew Mountbatten Windsor’s silence in the face of the Oversight Democrat’s demand for testimony speaks volumes.

“The documents we’ve reviewed, along with public records and Virginia Roberts Giuffre’s testimony, raise serious questions he must answer, yet he continues to hide.

“Our work will move forward with or without him, and we will hold anyone who was involved in these crimes accountable, no matter their wealth, status, or political party. We will get justice for the survivors.”

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The new Epstein files: The key takeaways

It follows Andrew being stripped of his prince and Duke of York titles earlier this month.

He had previously agreed to stop using his titles, but had expected to remain a prince and retain his dukedom, ahead of the publication of the memoirs of the late Ms Giuffre, who had accused him of sexually assaulting her when she was a teenager – an accusation he denies.

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Girl, 13, arrested on suspicion of murdering woman in Swindon

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Girl, 13, arrested on suspicion of murdering woman in Swindon

A 13-year-old girl has been arrested on suspicion of murdering a woman in Swindon.

Police said the teenager was detained following an incident in Baydon Close, Moredon, in the Wiltshire town on Friday evening.

Officers responded to reports of disorder inside a house. When they arrived, a woman in her 50s living at the address was found to be not breathing. She was declared dead at the scene.

There were no other reported injuries.

Forensic officers are at the scene to collect evidence
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Forensic officers are at the scene to collect evidence

Detective Inspector Darren Ambrose, from Wiltshire Police’s major crime investigation team, said: “This is a serious incident in which a woman has sadly died.

“We have set up a cordon at the address while an investigation is carried out.

“I can confirm that we have arrested a teenage girl in connection with this incident and we are not looking for anyone else.”

Police have asked people not to speculate about the incident online as this could prejudice the case.

A police statement read: “Residents can expect to see an increased police presence in the area while we continue carrying out our enquiries into the woman’s death.

“The suspect remains in custody at this time.”

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Police said anyone with concerns should speak with their local neighbourhood policing team, either by emailing or approaching officers in person.

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Rail fares to be frozen for first time in 30 years

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Rail fares to be frozen for first time in 30 years

Rail fares are to be frozen for the first time in 30 years, the government has announced.

Ministers promised that millions of rail travellers will save hundreds of pounds on regulated fares, including season tickets and peak and off-peak returns between major cities.

The fare freeze applies to England and services run by English train operators.

People commuting to work three days a week using flexi-season tickets will save £315 a year travelling from Milton Keynes to London, £173 travelling from Woking to London and £57 from Bradford to Leeds, the government said.

The changes are part of Labour’s plans to rebuild a publicly owned Great British Railways. Other planned changes include tap in-tap out and digital ticketing, as well as investing in superfast Wi-Fi.

The freeze applies to regulated fares, including season tickets and peak and off-peak returns. Pic: iStock
Image:
The freeze applies to regulated fares, including season tickets and peak and off-peak returns. Pic: iStock

Chancellor Rachel Reeves said the government was introducing a freeze on rail fares for the first time in 30 years, which “will ease the pressure on household finances and make travelling to work, school or to visit friends and family that bit easier”.

“We all want to see cheaper rail travel, so we’re freezing fares to help millions of passengers save money,” Transport Secretary Heidi Alexander said.

“Commuters on more expensive routes will save more than £300 per year, meaning they keep more of their hard-earned cash.”

Rail unions and passenger groups welcomed the move, praising how it will make travel more affordable for passengers and promote more sustainable travel alternatives.

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Eddie Dempsey, general secretary of the Rail, Maritime and Transport union, said: “More affordable fares will encourage greater use of public transport, supporting jobs, giving a shot in the arm to local economies and helping to improve the environment.”

TUC general secretary Paul Nowak said the rail fare freeze “will be a huge relief to working people”.

“This is the right decision, at the right time, to help passengers be able to afford to make that journey they need to take, and to help grow our railway in this country, because the railway is Britain’s green alternative – taking cars and lorries off our congested roads and moving people and goods safely around our country in an environmentally-friendly way,” Mick Whelan, general secretary of the train drivers union Aslef, said.

The Tories welcomed the move but said the government was “late to the platform”.

Shadow transport secretary Richard Holden said: “In government, the Conservatives kept fares on the right track with below-inflation rises and consistently called for no further hikes to protect hard-working commuters.”

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