NewsRescue
Nottingham, the hometown of folklore legend Robin Hood and iconic designer Sir Paul Smith, declared itself bankrupt on Wednesday.
Nottingham City Council declared a massive budget imbalance and an inability to balance the books for the fiscal year 2023-24. The authority issued a section 114 notice, which means it will halt all new spending save for funds for vulnerable groups and statutory services like social care and garbage collection.
Nottingham is apparently on track to overshoot its budget by £23 million ($29.1 million) this year. According to the municipal council, an increase in social care requests for children and adults, increased homelessness, and continuously high inflation are putting further strain on the budget.
However, the authority also has to deal with financial troubles piling up from previous years, such as the collapse of the council-run Robin Hood energy scheme in 2020, which cost taxpayers some £38 million.
Council leader David Mellen insisted to the BBC that the city “will continue to pay our bills.” He previously blamed the city’s financial woes on the year-on-year reduction of funding from central government, estimated at some £100 million annually over the past decade. In his statement on Thursday, Mellen warned that the lack of state support was a countrywide problem and said more cities could go insolvent.
“Councils are using their reserves at a higher value than us this year to solve their budget problems, and they will be in trouble next year unless the government provides adequate funding for social care.” “This is a national issue in which local governments are being starved of resources,” he explained.
A meeting of all city councillors is scheduled for the next 21 days to review the situation in Nottingham and potential solutions.
Nottingham is not the only city in the United Kingdom to face financial difficulties in recent months. Birmingham, the country’s largest metropolitan region outside of London, issued its own section 114 notice in September over a £760 million equal pay demand.
