Nottingham City Council stops all but essential spending after declaring itself effectively bankrupt

The council has named rising inflation and increased demand for children's and adult's social care as reasons behind the S114 notice Credit: ITV News Central

Nottingham City Council has declared itself effectively bankrupt after issuing a Section 114 notice.

The authority will halt all spending other than services it must provide by law after it was unable to deliver a balanced budget for this year, which is a legal requirement. 

It follows Birmingham City Council which issued an S114 notice in September after admitting that it could not manage its catastrophic financial crisis without help.

A report discussed at the Labour-run Nottingham City Council’s Executive Board meeting on 21 November showed that it was set for a £23m overspend in the 2023-24 financial year.

It highlighted that a significant gap remains in the authority’s budget, due to issues including an increased demand for children’s and adults’ social care, a rising number of rough sleepers and the impact of inflation.    

The council says it has "sufficient financial resources to meet all of its current obligations, to continue to pay staff, suppliers and grant recipients in this year."

A meeting of all councillors will now need to take place within 21 days to consider the report and an immediate prohibition period starts today.

GMB Union, one of Nottingham City Council’s largest staff unions, has responded to the announcement that the authority has issued a Section 114 notice.

Adana Godden, GMB Organiser, said: “Nottingham City Council has fallen victim to the Government’s neglect of our vital local services.

“The council's funding has been cut by more than 40 per cent since 2010; it’s shocking that this Government are sitting on the side lines as local communities suffer.

 “This news will no doubt cause great anxiety for workers in Nottingham.

"GMB will be focused on making sure that the people who keep Nottingham running are heard in the days and weeks ahead.”

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