Overview

• Nottingham City Council has declared itself effectively bankrupt, issuing a section 114 notice, which means it will stop all spending other than services it must provide by law.
• The council is facing a £23m overspend in the 2023-24 financial year, with increased demand for children's and adults' social care, rising homelessness, and the impact of inflation putting extra pressure on its finances.
• Poor financial governance in the past and an overspend in the last financial year have also impacted the council's financial resilience and ability to draw on reserves.
• The council's bankruptcy follows the financial failure of Birmingham City Council earlier this year, marking a growing trend of local authorities in England facing financial difficulties.
• The Department for Levelling Up, Housing and Communities, which has been monitoring the council, expressed concern over the lack of urgency demonstrated by the council in addressing these challenges.