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Economy Nottingham council announces effective bankruptcy citing increased social care demand

by Berny Torre

NOTTINGHAM CITY COUNCIL became the latest local authority yesterday to declare itself effectively bankrupt.

The Labour-run council’s chief financial officer said the authority was unable to deliver a balanced budget, with a £23 million overspend predicted in the 2023-24 financial year.

It issued a section 114 notice, meaning all new spending save for protecting vulnerable people and statutory services must stop immediately.

The authority was already being monitored by the government having been beset by financial issues in recent years.

It lost millions from its failed attempt to enter the power market with Robin Hood Energy in 2020.

The announcement came after Birmingham City Council issued its own 114 notice back in September.

The council said in a statement: “Senior officers and members remain committed to continuing to work with the improvement and assurance board and the Department for Levelling Up, Housing and Communities to put the council on a stable financial footing for the future.”

The authority cited increased demand for children’s and adults’ social care, rising homelessness and the impact of inflation as putting extra pressure on its finances.

It is due to hold a meeting within the next 21 days to discuss the situation.

The Department for Levelling Up, Housing and Communities said: “We used our statutory powers to intervene at Nottingham City Council last year over serious governance and financial issues and have been clear that improvements must be made.

“We have expressed concern over the lack of urgency demonstrated by the council in addressing these challenges, despite the efforts of the improvement and assurance board.”

Nottingham Labour said the demand for its services was rising, while “funding from the government gets less in real terms each year.”

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