Another UK council on Wednesday declared that it could not balance its books, after similar action by other local authorities blamed in part on years of central government under-funding.
Nottingham City Council in central England said it had issued a Section 114 Notice under the Local Government Finance Act 1988, meaning it can now only spend on essential services.
Fears have been growing that other cash-strapped UK councils would follow Birmingham — one of Europe’s largest local authorities — which announced it was struggling financially in September.
Nottingham said it had a £23-million ($29-million) hole in its budget this year, blaming pressures from increased demand for child care and adult social services, rising homelessness and high inflation.
“The council is not ‘bankrupt’ or insolvent, and has sufficient financial resources to meet all of its current obligations, to continue to pay staff, suppliers and grant recipients in this year,” a statement read.
By law, councillors at the Labour-run local authority now have to come up with an action plan to tackle the shortfall within 21 days.
Councils which have previously declared financial distress include…
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