No more councils are expected to issue any warnings that they cannot balance their books in the next few weeks, MPs have heard.

Jeremy Pocklington, permanent secretary at the Department for Levelling Up, Housing and Communities, told a select committee that the financial position for councils was ‘sustainable’.

He said it had been strengthened by a £5bn cash injection in last year’s Autumn statement, an average increase of 9%.

Whitehall experts believe the new money should prevent more s114 notices already issued by local authorities including Thurrock, Northumberland and Croydon councils.

However, Mr Pocklington added that councils were still facing pressures. 'Not all of those are money-related but some of them are,’ he said.

'They come from inflation, from increased demand for public services – particularly social care – and, like other parts of the economy [councils], struggling in a tight labour market.’

Catherine Frances, the department’s director general for local government, added: ‘I’m not aware of anyone who is about to issue a section 114 notice.’

Meanwhile Nico Heslop, director of local government finance at the department, told a Local Government Association conference that the recent financial settlement showed the sector was one of the highest priorities for funding for the Government alongside the NHS and schools.

He added: ‘We recognise it’s not problem solved and there are real challenges facing the sector still, but if someone said to me after the Autumn statement we would end up in this position I would have bitten their hand off.’