A Labour-led council is on the verge of bankruptcy thanks to a multi-million-pound budget gap.
Nottingham City Council reported a £26 million gap in its finances in July this year, with its finance chief warning “difficult decisions” lay ahead.
Now, Nottinghamshire Live has reported the council may issue a Section 114 notice declaring bankruptcy in the coming days.
According to the publication, issuing the notice would indicate spending for the current financial year – which ends in April 2024 – will exceed the body’s allotted funds.
But Nottingham’s population of approximately 323,700 may have to wait up to a week until they officially know the local government’s fate.
Nottinghamshire Live has also reported that an official announcement about the alleged bankruptcy will come “in the coming days”.
Deciding whether to make such a move would fall to the council’s 50-strong Labour group, who would discuss the potential course of action at a weekly meeting of Nottingham City Council’s executive.
A section 114 notice is issued under the authority of the council’s Chief Financial Officer (CFO).
While the council may collectively decide to issue the notice, the CFO may do so on their own authority.
The CFO would need to send a section 114 notice to each of Nottingham City Council’s councillors informing them any new spending is banned for a select period.
The councillors would then have 21 days to consider the notice before deciding whether they agree with the CFO on the best course of action.
Only the CFO can greenlight any new expenditures, providing they believe they could lessen the severity of the council’s situation, improve it, or prevent a future bankruptcy notice.
Nottingham City Council leader David Mellen has already warned the local government body could struggle to deliver services, and Labour has blamed the situation on increased demand for its services and a lack of central Government funding.
Speaking in September, he said: “The questions will be asked about whether we’ll be able to continue doing everything that we currently do in the same way, I think that’s quite unlikely.”
Express.co.uk has approached Nottingham City Council for comment.
