Nottingham City Council has refuted claims that it is on the verge of bankruptcy.

The council issued a statement after claims appeared in the media that it was on the brink of financial collapse.

Cllr David Mellen, leader of the council, said it fully accepts the findings of a rapid review carried out on behalf of the Ministry of Housing, Communities and Local Government that highlights serious issues around financial management and governance.

However, he said: ‘The report does not use the word “bankruptcy”. It does highlight that the council needs to make savings in order to resolve our very difficult budget situation and we are currently developing budget proposals in order to meet that challenge.’

Cllr Mellen added: ‘It highlights that we have been slow to act on warnings about the risk of relying on one-off savings and income through commercialisation and that we should have been managing budgets on a longer term basis to reduce core expenditure and transform services.

‘The council’s capital expenditure and high levels of debt compared to other cities is also flagged up as a major concern with the cost of borrowing restricting our flexibility on day-to-day spending.’