Rob Mayor
Political reporter, BBC Radio WM

A bailout for Birmingham City Council has already been ruled out, earlier this summer, by the prime minister when he made a visit to the city.

In July, Rishi Sunak said it was "not the government's job to bail out the council for its financial mismanagement".

Labour MPs were calling on ministers to step in after the council revealed the scale of its financial struggles.

"The council just needs to do a better job of managing the figures properly and delivering good quality services to residents," Sunak said.

Croydon Council hiked council tax by 15% after declaring itself bankrupt for a second time in three years in November.

At the time, it estimated it would need to plug a £130m-hole to balance the budget – which is a legal requirement for authorities.

The council also looking at selling off local libraries and a retail park.It estimated it could raise about £100m by selling off 18 properties it owned.

Thurrock and Slough councils have also previously declared bankruptcy. Both councils raised council tax by 10%.

Thurrock Council also asked the government for a £636m bailout alongside the tax hike.

Alex Forsyth
Political correspondent

There are particular circumstances affecting Birmingham City Council to do with a bill for equal pay claims and a problematic IT system, but it’s not the only council facing tough financial times.

The government has made more money available to local councils to spend for this year and next year, but councils say the cost of providing services has shot up so much they’re still short.

Some are turning to their reserves - basically money they’ve set aside - to help pay for day-to-day spending, and others are trying to find ways to cut back.

That can affect the services that people rely on, like leisure centres or support for people with disabilities.

Remember, councils were hit hard during the years of austerity - and so now some are warning that they are really struggling to make ends meet.

• Read more on councils' cash crisis here.

Image source, Getty Images

If you're just joining our live coverage, here's a quick refresher to get you up to speed.

• Birmingham City Council, which is the largest local authority in Europe, has declared itself effectively bankrupt
• A Section 114 notice has been issued preventing all but essential spending to protect core services
• The move has come after the authority announced it was facing a bill up to £760m for unequal pay claims that it couldn't afford
• The leaders of the Labour authority have said the measures are a "necessary step as we seek to get our city back on a sound financial footing"
• The council's Conservative opposition leader has said the authority "failed to show the proper speed and urgency needed to tackle equal pay"

Stick with us as we bring you the latest updates and reaction.

Image source, Birmingham City Council

Birmingham can't now make any new spending commitments, the only exceptions being funding for statutory services.

The council had already halted non-essential spending in July.

However it wasn't exactly clear exactly what "non-essential" might include – parks, libraries, cultural projects or even the city's hosting of European Athletics Championships in 2026?

At the time, deputy council leader Sharon Thompson said the council would "do everything" to protect the services.

But in one example, Kynton Swingle, from the charity Fox Hollies Community Association, said it could mean groups like theirs might have to stop services.

Their organisation offers a range of support including free meals for youngsters and acts as a warm hub for people struggling to heat their home.

The financial freeze would mean a "really challenging environment" and "there is definitely concern", Swingle said.

The GMB Union - which has represented council workers in the equal pay claims that have been linked to the council’s financial difficulties - has released a strongly worded statement calling the announcement a "humiliating admission of failure" on the part the council's officials and leadership.

"Not only are they responsible for creating this crisis through years of discriminating against their own staff, but even they no longer believe themselves capable of fixing it," says GMB Organiser Michelle McCrossen.

She accuses the council of stealing wages "from its low-paid women workers" and running up a huge equal pay liability "that has brought Birmingham to the brink".

Rob Mayor
Political reporter, BBC Radio WM

When Birmingham City Council first announced plans to cease all non-essential spending in July, it sounded like it was issuing a section 114 notice, effectively bankruptcy in all but name.

Today all hope of avoiding that faded away.

The council is unable to balance its budget, its financial problems are huge and, at the moment, getting bigger at rate of up to £14m a month.

Last year’s triumphant Commonwealth Games were hailed as the start of a "golden decade" for the city.

Instead, it is residents who now face a future of cuts to services.

Image source, Conservative Party

The situation has been heavily criticised by the leader of the Conservative opposition on the authority.

Councillor Robert Alden says the Labour-run council "failed to show the proper speed and urgency needed to tackle equal pay".

The authority had pledged a "golden decade" at local elections in 2022 but it's refusal to deal with equal pay over the past 10 years "created this mess", he says.

"Residents will now lose valuable services and investment," says Alden.

Another issue adding to the council's financial woes is its Oracle IT system.

Council leader John Cotton said earlier this year "the total cost may run to £100m" in order to fix problems.

The IT issues have been affecting payments, data management and background checks.

The Oracle system was brought in to overhaul internal functions including payments and HR processes.

According to a council report, the authority was meant to change such processes to fit Oracle's requirements.

Instead, another approach was taken and the problems emerged.

It is estimated the final cost to put things right is in the region of £100m, with the report requesting £46.53m this year to fund.

Read more on this story here.

• If a council's chief financial officer believes the authority can't meet its spending commitments they have to issue such a notice

• Local authorities in the UK can't actually go bankrupt - but the issuing of the notice is often described as "being effectively bankrupt"
• No new expenditure is allowed with the exception of funding statutory services, including safeguarding vulnerable people, but existing commitments and contracts will continue to be honoured
• Most councils in such a position pass an amended budget, cutting spending
• Thurrock, Croydon, Slough and Northamptonshire have issued section 114 notices in recent years

Image source, Getty Images

As we've been reporting, Birmingham City Council's financial pressures have been linked to a £760m equal pay bill it faces.

Earlier this year, the council said it was in talks with the government to settle the claims and would have fewer resources in the future.

The council also said it would have to reprioritise where it spends taxpayers' money.

The bill is equivalent to the council's entire annual spending on services and has been growing by up to £14m each month.

The Labour-run council - the largest local authority in Europe - has already paid out £1.1bn to settle claims after a ruling at the Supreme Court over pay in 2012.

Read more on this story here.

Birmingham City Council had already halted all non-essential spending in July as it sought to get its finances under control.

The move came after the authority announced it was facing a bill up to £760m for unequal pay claims that it couldn't afford.

Because of the situation, the council issued the Section 114 notice. This confirmed there were insufficient resources to meet the equal pay expenditure and no other means of meeting that cost.

Image source, PA Media

Allen Cook
BBC News

The pressures leading to the issuing of the Section 114 notice have been linked to a bill of up to £760m to settle equal pay claims.

In a joint statement, the leader and deputy leader of the Labour-controlled authority said the notice was a "necessary step as we seek to get our city back on a sound financial footing".

Opposition leader Robert Alden, Conservative, said the council had "failed to show the proper speed and urgency needed to tackle equal pay".

Image source, PA Media

Allen Cook
BBC News

Good morning, we are bringing you the latest around the news that Birmingham City Council has declared itself effectively bankrupt.

The local authority, the largest in Europe, has issued a Section 114 notice preventing all but essential spending to protect core services.