Which Councils Are Going Bust?
A Section 114 notice is the formal mechanism a council uses when its finance officer decides it cannot balance its budget — media coverage often calls this "effective bankruptcy," though councils can't legally go bankrupt the way a company can. Once issued, all non-essential new spending must stop immediately.
Fourteen Section 114 notices have been issued by English councils since 1988. This list covers the most significant confirmed cases and isn't exhaustive — get in touch if you think something's missing. Four of the largest cases have a full deep-dive below.
Since 2020, councils have been allowed to keep deficits from the Dedicated Schools Grant (which funds support for children with special educational needs) off their main balance sheets under a temporary "statutory override." That override expired on 31 March 2026. The National Audit Office estimated cumulative council deficits of around £4.6bn by that point, and the County Councils Network warned that as many as 18 councils could become insolvent overnight when the override ended, with a further 6 following in 2027. An LGA survey found 53% of councils responsible for SEND provision expected to be unable to set a balanced budget for 2026/27 without further reform or funding. This is a much bigger, more systemic risk than any single council on this page — potentially affecting dozens of authorities at once. We don't yet have confirmation of exactly what happened when the deadline hit; we'll update this as soon as we do.
Barnet London Borough Council
20 January 2025A narrower case than most on this list. In April 2020 the council made a £20.5m one-off prepayment to its pension fund, intended to cover three years of contributions and secure a discount — but the payment lacked required sign-off from the pension fund committee and wasn't checked against the fund's actuary. Two repayments (£6.5m and £7.6m) were later returned, but a third planned repayment of £7.8m never happened. The notice explicitly stated no money had been lost and didn't require any freeze on spending — a governance failure, not a financial crisis.
Nottingham City Council
November 2023Years of financial mismanagement, including heavy losses from Robin Hood Energy — a council-owned energy company that collapsed after costing the authority tens of millions of pounds. Commissioners later described the council as operating “significantly beyond its means” and “far from sustainable.”
Birmingham City Council
September 2023Europe's largest local authority. The notice cited an £87m in-year overspend for 2023/24 plus a projected £760m equal-pay liability, with a further £375m budget gap for 2024/25 and no savings plan to close it. Compounded by a troubled Oracle IT system rollout that made it hard to even track the council's own spending. The council has since sold off assets worth roughly £750m to help cover the liabilities.
Read the full story →Woking Borough Council
7 June 2023A government review found Woking's debts would reach £2.4bn by 2026 — around 100 times its annual £24m budget — built up through investments in hotels, residential skyscrapers, and even a £6.4m loan to a local private school. Auditors later found a history of “potentially unlawful” lending and “wholly inadequate” governance behind the borrowing.
Read the full story →Thurrock Council
December 2022One of the most severe local government financial scandals on record: roughly £655m invested in solar energy bonds that collapsed, leaving debts of around £1.5bn. A Serious Fraud Office investigation is now underway into where the money actually went.
Read the full story →Croydon London Borough Council
November 2020, November 2022, November 2023Issued a Section 114 notice three times in three years, driven by roughly £545m borrowed for commercial property investments — including a hotel and a retail park — that lost most of their value.
Read the full story →Slough Borough Council
July 2021Uncovered serious 'black holes' in its accounts, including historic under-reporting of debt and troubled commercial property investments.
Northamptonshire County Council
February & November 2018The first council since 2000 to issue a Section 114 notice, following a large overspend and rapidly declining reserves. The fallout led directly to the county council being abolished and replaced by two new unitary authorities in 2021.
Hackney London Borough Council
2000One of the first two councils ever to issue a Section 114 notice, following serious financial mismanagement including unreliable accounts and uncollected council tax.
Hillingdon London Borough Council
2000The first council in England to ever issue a Section 114 notice, setting the precedent other authorities have since followed.
Currently at risk
These councils have publicly warned a notice may be coming — none has confirmed issuing one yet. Not the same as the confirmed cases above.