Cash-strapped Nottingham City Council has been forced to issue a section 114 notice after revealing it faces a significant in-year deficit.

A report discussed this week by the council’s executive board warned that the local authority’s in-year deficit is estimated at £23.3m.

The council said the ‘significant gap’ in the budget is the result of increased demand for children’s and adults’ social care, rising homelessness, and the impact of inflation.???

The city council recently implemented cost control measures to help ease its financial pressures, including the decision not to fill specific vacant posts.

However, the council’s Corporate Director for Finance and Resources and Section 151 Officer, Ross Brown, today issued a section 114 report to all councillors.

Nottingham is the third largest authority to issue an s114 in recent months, after Birmingham and Croydon LBC.

Commenting on the announcement, Jonathan Carr-West, chief executive, LGIU, said: 'Sadly this news comes as no surprise. We know that around one in ten councils are at risk of effective bankruptcy. This represents a tragedy for millions of citizens who see the services they rely on at risk even as their bills rise.

'Councils have been continuing to pull every lever available to them to balance their books: raising council tax, cutting services, and spending their finite reserves, and still we are seeing an ever-increasing number of councils unable to make ends meet in the face of central government spending cuts and increasing demand for – and cost of – council services, particularly adult and children’s social care.

'It doesn’t have to be this way. Councils need multi-year financial settlements where funding is connected to service demand not to political expediency and they need more powers over raising and spending their own revenue.'

If this article was of interest, then check out our feature, 'Preventing future Section 114 notices'.