Nottingham City Council’s chief finance officer today declared that the council is unable to deliver a balanced budget, which is a legal requirement.

The council began considering issuing the section 114 notice earlier this month.

Such a notice prevents all spending apart from on essential services.

This comes less than three months after Birmingham City Council, the largest local authority in Europe, declared itself effectively bankrupt in September.

In June, Birmingham called an unofficial spending freeze after it revealed a £750m bill to settle equal pay claims.

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Nottingham Council cited increased demand for children’s and adults’ social care, rising homelessness and the impact of inflation as putting extra pressure on its finances.

It also blamed “past issues relating to financial governance which led to the appointment of an Improvement and Assurance Board”, combined with an overspend in the last financial year.

It said this has had an impact on its “financial resilience” and ability to draw on reserves.

Nottingham City Council will hold a meeting within the next 21 days to discuss the situation.

In a statement, it said: “Senior officers and members remain committed to continuing to work with the Improvement and Assurance Board and the Department for Levelling Up, Housing and Communities to put the council on a stable financial footing for the future.”