Labour-run Council Admits Inability to Deliver Balanced Budget

The Labour-run Nottingham City Council announced today that it is unable to meet the legal requirement of delivering a balanced budget for this year. As a result, the council has declared itself "effectively bankrupt."

All New Spending to Stop, with Exceptions

A Section 114 notice has been submitted, which means that all new spending will immediately cease, with the exception of protecting vulnerable people and statutory services.

Second Local Authority to Issue Section 114 Notice This Year

This is the second time this year that a local authority has declared a Section 114 notice. In September, Labour-run Birmingham City Council did the same.

Financial Difficulties Stem from Failed Energy Venture and Ringfenced Funds

The council faced significant financial losses after its unsuccessful attempt to enter the power market with Robin Hood Energy in 2020. Additionally, millions of pounds that were earmarked for local housing were spent as part of the council's general budget. Inflation and cost of living pressures have also contributed to the council's dire financial situation.

Statement from Nottingham City Council

The council released a statement clarifying that it is not "bankrupt" or insolvent and has enough financial resources to meet its current obligations, including paying staff, suppliers, and grant recipients for this year. However, the forecasted gross General Fund pressure is around £57 million, which requires management and corrective actions.

Criticism from Immigration Minister and TaxPayers' Alliance

Immigration Minister and MP for Newark, Robert Jenrick, criticized the council for "breathtaking waste and incompetence," calling for the appointment of commissioners to restore order. Elliot Keck, head of campaigns of the TaxPayers' Alliance, also blamed financial incompetence for the council's bankruptcy and warned other council leaders against gambling with taxpayers' money.