Northamptonshire County Council has been forced to impose emergency spending controls after warning that it faces a "severe financial challenge".
The Conservative-controlled council has issued a section 114 notice banning all new expenditure apart from statutory services for safeguarding vulnerable people.
In a statement, the council said: "The notice has been served in light of the severe financial challenge facing the authority and the significant risk that it will not be in a position to deliver a balanced budget by the end of the year."
Council leader Heather Smith said they had been warning ministers for years that their position was "unsustainable", and had raised her concerns directly with Communities Secretary Sajid Javid shortly before Christmas.
For Labour, shadow communities secretary Andrew Gwynne said: "The failure of this Tory-run council shows that their approach to managing our public services doesn't work.
"There have been deeply worrying reports for a number of months that this council was failing in its duty to the people of Northamptonshire - and now these people will pay the price for this negligence."