Increases in inflation following a no-deal Brexit could put pressure on services in councils which have large private finance initiative (PFI) contracts, according to a local authority.
In a report on the potential impact of the UK’s decision to leave the UK, Nottingham City council said: “Any increases in inflation at key times will lead to an increased payment to the contractor.
“Any significant inflationary increase will create a funding gap that will need to be met from council budgets.
“This will cause an additional financial pressure within the Council, which will also be in effect locked in and compounded for the duration of the contract”.
Nottingham holds six PFI contracts, jointly funded by government grants and the council.
A separate report by officers at City of London Corporation this week identified nine major risks from Brexit, including procurement and supply chain issues, retention and recruitment of staff and income streams.
