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Nottingham City Council has been issued a 114 notice, meaning no further expenditure is permitted.
On Wednesday 29 November, the local authority revealed a significant shortfall in its budget, with the council’s chief financial officer determining that it was unable to formulate a balanced budget for the current year.
Jonathan Carr-West, chief executive, LGIU, said: “Sadly this news comes as no surprise. We know that around one in ten councils are at risk of effective bankruptcy. This represents a tragedy for millions of citizens who see the services they rely on at risk even as their bills rise.
“Councils have been continuing to pull every lever available to them to balance their books: raising council tax, cutting services, and spending their finite reserves, and still we are seeing an ever-increasing number of councils unable to make ends meet in the face of central government spending cuts and increasing demand for – and cost of – council services, particularly adult and children’s social care.
“It doesn’t have to be this way. Councils need multi-year financial settlements where funding is connected to service demand not to political expediency and they need more powers over raising and spending their own revenue.”
He added: “Government is quick to point the finger at ‘failing councils’ but the truth is we have a broken system.”
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