English town halls face unprecedented rise in bankruptcies, council leaders warn

Grim forecast comes after Nottingham city council became fourth authority in the past 12 months to declare insolvency

The financial crisis engulfing English local authorities will trigger an unprecedented increase in town hall bankruptcies in the coming months, local government leaders have warned, as they prepare to increase council tax bills and impose a fresh round of cuts to services.

The grim forecast, endorsed by council leaders of all political colours, comes days after Labour-run Nottingham city council issued a Section 114 notice to become the fourth authority in the past 12 months – and the eighth in six years – to declare effective insolvency.