Levelling up secretary Michael Gove has stated that Nottingham City Council’s issuance of a section 114 notice (s114) was not caused by a lack of central government funding despite its spending power decreasing by 28% since 2010/11.
At a Levelling Up, Housing and Communities (LUHC) Committee inquiry session last night (6 December), Gove was questioned about the funding pressures authorities face and the government’s role in the events that led up to Nottingham City Council’s issuance of an s114 in November.
MPs highlighted that the government has cut local authorities’ funding since 2010, whilst the demand for councils’ services has continued to increase.
In the specific case of Nottingham, a member of the LUHC committee noted that the authority’s spending power has decreased by 28% since 2010/11 and questioned Gove whether the council would have had to issue a s114 report if its funding hadn’t been cut.
“I believe that the issue is not about the level of government support. The issue is about the system problems of leadership and governance within Nottingham City Council. I don’t believe that it is the fault of central government at all.
“I think there’ll be very few people that would say that the political leadership of the city council has been exemplary over the last few years,” Gove said.
The levelling up secretary added that the government will be announcing “more” measures specifically about Nottingham and the ongoing intervention of the council “before parliament rises for the Christmas recess”.
‘Risk’ of more s114s
When speaking about the whole of the sector and the recent warning that one in five local authorities could be faced with issuing an s114, Gove did state that he was “concerned” about the financial position of councils.
However, he noted that the “core spending power has increased and the amount of money that central government is allocating to local government has increased above inflation”.
Gove stated that there is a “risk” of more local authorities issuing s114s, but the one in five estimate from the Local Government Association’s (LGA’s) analysis is on the “toppish end of the scale”.
He stated that the government has a council “watchlist” of its own, which is a “moveable feast”, so in comparison to this “it’s fair to say” that the LGA’s survey is an “overestimate”. Gove refused to disclose how many authorities were on this list.
Also, in some cases of councils expressing concern about an s114, the government has discovered that “perhaps the concern is not merited”. This is due to warnings articulated by political figures rather than section 151 officers, Gove explained.
However, interestingly the levelling up secretary did not deny that issuing an s114 has moved from being “idiosyncratic” to being “systemic”.
He told MPs: “It is absolutely the case that each of the local authorities that have had to issue s114s have had failures of leadership, management and governance. And some have taken risks that were unmerited.
“It may be the case in the future, that there are some local authorities that have been relatively well managed that will face particularly acute pressures.
“But I wouldn’t want to, at this stage, predict that an s114 will be issued by a local authority that has been well managed so far.”
However, when questioned how the government anticipates helping councils as they currently face a funding gap of £4bn over the next two years, Gove reiterated his earlier point that authorities’ funding has moved in line with inflation in the last two years.
In the case of future funding certainty, Gove added that he “wouldn’t want to pre-empt the next spending review that will inevitably occur” in 2025.
The secretary of state also offered no additional information on funding for adults and children’s social care. However, he did suggest that the department is looking into issues in children’s services, particularly concerning the practice of private equity firms.
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