UK Towns Are Going Bankrupt. Here’s What’s Gone Wrong 

UK town halls are slashing spending on everything from parks to adult social care and the arts in the face of an unprecedented funding crisis. Long-running financial pressures caused by central government cuts, rising demand for services and risky investment bets have been compounded by double-digit inflation, pushing many councils deep into debt. The crisis has already claimed high-profile victims including Birmingham, Europe’s largest local authority, and there are warnings that more municipalities could go bankrupt in the run-up to national elections later this year.

Birmingham, Nottingham and Woking effectively declared bankruptcy by issuing so-called section 114 notices last year and are now making deep cuts to local services. This could be the tip of the iceberg. A survey by the Local Government Information Unit found that just over half of councils said they are likely to go bust over the next five years. Almost a tenth said it could happen in the next financial year. A number are trying to stave off bankruptcy by seeking “exceptional financial support,” allowing them to sell off assets to help fill holes in their budgets. Southampton and Bradford are among those asking for this flexibility. Some may also have to issue 114 notices if that support isn’t enough to prop up their finances.