Nottingham City Council has revealed plans to dispose of a proportion of its investment property assets to help repay exceptional financial support (EFS) and alleviate budget pressures.
A report, scheduled to be presented to the authority’s executive board on 17 September, recommends that council members approve a list of assets from Nottingham’s property trading account to be put up for sale.
This forms part of a broader “asset rationalisation programme and improvement plan” for Nottingham. The authority has been under government intervention since September 2022 and issued a section 114 notice in November 2023.
In 2022, it was reported that the council owned over 3,600 property assets, with a combined asset value exceeding £1bn. However, the total value of the assets recommended for disposal has not yet been disclosed by the council.
The sale of the property assets is expected to generate capital receipts, which will help the council manage financial challenges, including its £50m budget gap for the current financial year and savings requirement of £36m for 2024/25 to 2027/28.
Alongside this, Nottingham was granted approximately £66m in EFS from the government. However, this is not additional funding from the government and must be repaid.
“The council has a requirement to repay exceptional financial support in year as well as a range of other items such as the repayment of borrowing, transformation, and approved projects.
“The disposal of income and non-income producing assets will deliver a programme of capital receipts to repay these items,” the report said.
Nottingham is not the only council to receive EFS from the government, with 18 other councils receiving additional finance for 2024/25. Eight local authorities were also awarded EFS for 2023/24.
The report further advised against retaining the assets proposed for sale, as this “presents a financial risk to the council”.
According to the authority’s latest treasury management report, Nottingham City Council produced £38.5m of capital receipts in 2023/24.
The council also managed to reduce its total borrowing from £878m to £800m in the last financial year. This included reducing its Public Works Loan Board borrowing from £825m to £757m, Lender Option Borrower Option loans from £49m to £41m and temporary borrowing from £4.3m to £2.3m.
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