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Nottingham goes bankrupt [print version]

Nottingham Council House. Photo tshrinivasan (CC BY 2.0 DEED).

Local government minister Simon Hoare announced in February that commissioners would be appointed to run Nottingham City Council. This follows the Labour-run council issuing a section 114 notice after the council overspent by £23 million – effectively declaring itself bankrupt.

The commissioners will have extensive direct powers – over the council’s finances and running front-line services. This is the second recent instance of a council being unable to run. More are expected to follow, despite the increases in council tax announced in March.

People are suffering big rises in council tax along with cuts to or abolition of needed local services. No political party has set out a plan to find the money to fund these services. Each blames the other.

Last year Birmingham City Council, the largest local authority in England, declared itself bankrupt. Government sent in commissioners to the council after it issued the same bankruptcy notice in September.

Bradford, Cheshire East, Durham, Middlesbrough, Somerset, and Stoke-on-Trent all face an immediate threat of bankruptcy. Others like Kirklees are making deep cuts to services, hoping to avoid this.

An estimated 127 councils out of a total of 317 in England are at risk within the next five years. In a few cases such as Thurrock, Spelthorne and Croydon councils seem to have suffered from very poor decisions and leadership. But for most the problems are linked to excessive debt – getting worse as interest rates rise.

Somerset declared “a financial emergency” in November. Cuts in the county include more than 1,000 council staff redundancies, and a halt in funding for public toilets, CCTV and theatres in the county. Plans to close five recycling centres, as well as cuts to funding for bus services and libraries, will be reviewed in the coming year.A similar scenario is playing out across the country.

• A longer version of this article is on the web at www.cpbml.org.uk