The council will have to stop all spending outside of services they legally have to provide.
Nottingham City Council has declared itself essentially bankrupt.
This means it will have to stop all spending apart from services they have to provide by law.
The Labour-run council has had a number of financial issues over the years and was already being monitored by the government.
Now the council’s chief financial officer said they are unable to deliver a balanced budget.
They have issued a report under section 114 of the Local Government Finanace Act 1988.
A recent report said they were set for a £23 million overspend in the 2023-24 financial year.
The council said an increased demand for children and adult social care, inflation and rising homelessness has put a pressure on their finances.
They added ‘past issues relating to financial governance which led to the appointment of an Improvement and Assurance Board’ alongside an overspend in the last financial year impacted their ‘resilience’ and reserves.
The council said in a statement: ‘A report discussed at the council’s Executive Board meeting on 21 November outlines the council’s latest financial position and highlights that a significant gap remains in the authority’s budget, due to issues affecting councils across the country.
‘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.
‘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.
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