Public services · The national record
Council finances in England
How English local authorities are faring financially, from government bailout data, formal notices of inability to balance the books, and the national revenue outturn. The number of councils receiving emergency government support rose from 19 in 2024 to 25, to 30 in 2025 to 26, to 37 in 2026 to 27, with about 1.51 billion pounds committed for the latest year. This page covers England only. The data are English local authority returns; comparable figures for Scotland, Wales and Northern Ireland are not included here.
How to read this
Exceptional Financial Support (EFS) is a loan facility that the government grants to councils facing an otherwise unmanageable budget gap. Receiving EFS does not mean a council is insolvent but it does signal that normal reserves and council tax income have proved insufficient. Amounts are published as agreed in principle and are sometimes revised in a later year's guidance. A Section 114 notice is a formal statement from a council's chief financial officer that current or future expenditure will exceed available resources. It freezes most new spending and is the nearest thing in local government to a declaration of insolvency. Reserves data are from the MHCLG Revenue Outturn return (RS) 2024 to 25. The proxy used here is unallocated financial reserves plus other earmarked financial reserves at 31 March 2025, divided by net current expenditure. This is a proxy, not an official distress measure.
EFS: gov.uk EFS guidance 2026 to 27, published 23 February 2026, last updated 30 July 2026 (2025 to 26 figures shown for comparison, published 20 February 2025). Section 114 notices: Institute for Government tracker (last updated 7 August 2024), reconciled against Barnet Council's own 20 January 2025 report and press coverage of Northumberland County Council's 23 May 2022 notice. Reserves: MHCLG Revenue Outturn RS data by local authority 2024 to 25, last updated 11 June 2026.
The surge in emergency support
From 30 councils to 37 in a single year
In 2025 to 26, 30 English local authorities were receiving Exceptional Financial Support from central government, up from 19 the year before. For 2026 to 27 that number rose again to 37, with in principle support of about 1513.3 million pounds for the year. Birmingham, the largest single recipient in 2025 to 26 at 180 million pounds, received no new award for 2026 to 27; its entry on the latest gov.uk list only revises down its support for earlier years. Since the EFS framework began in 2020 to 21, 42 local authorities had received over 5 billion pounds of support in total, a figure that predates this latest round and is now understated. The growth in the number of councils needing this support, and the scale of the sums involved, points to a structural gap between what English councils are expected to spend and what their income allows.
Councils receiving Exceptional Financial Support
Exceptional Financial Support 2026 to 27
The biggest bailouts
37 local authorities in England are receiving Exceptional Financial Support for 2026 to 27, totalling about 1513.3 million pounds. Shropshire heads the list at 121 million pounds, followed by Croydon at 119 million, Warrington at 92 million and Haringey at 84 million. Several councils appear on both the EFS list and the Section 114 list, including Barnet, Croydon, Hillingdon, Lambeth, Slough, Thurrock and Woking, reflecting the depth of their financial difficulty.
Exceptional Financial Support amount (millions of pounds) · top 10
37 councils in total, £1,513.3m combined for 2026 to 27. Up from 30 councils in 2025 to 26. Source: gov.uk EFS guidance 2026 to 27, published 23 February 2026, updated 30 July 2026.
Section 114 notices since 1988
15 councils, some more than once
15 councils have issued a Section 114 notice since 1988, on this page's own reconciled count: the Institute for Government's published tracker records 14 as of its last update in August 2024, one short because Barnet's notice in January 2025 postdates that update. The mechanism is rarely used; for most years since 1988 there were none. The pace has quickened sharply in recent years: Thurrock issued one in December 2022 after failed investments; Woking in June 2023 after accumulating a 1.2 billion pound deficit from risky commercial borrowing; Birmingham in September 2023 amid a combination of an Oracle IT failure and equal pay liabilities estimated at up to 760 million pounds; Nottingham issued its second notice in November 2023; and Barnet issued one in January 2025 over unlawful payments into and out of its pension fund. Three councils have issued more than one notice: Croydon three times (2020 and 2022), Northamptonshire twice (2018) and Nottingham twice (2021 and 2023).
Councils with more than one Section 114 notice
All Section 114 notices since 1988
Predicted budget deficit
Poll tax dispute - force councillors to authorise finances
Budget deficit
Budget shortfall
GBP 15.5m hole in finances
Prevent unlawful spending
Risk of GBP 10m deficit (first of two)
GBP 60-70m deficit projected (second of two)
GBP 60m overspend; ~GBP 1.5bn debts (first of three)
GBP 66m predicted overspend (second of three)
Budget deficit
Prevent unlawful spending (ringfenced HRA funds misused)
Unlawful expenditure: unauthorised chief executive allowance and Northumbria International Alliance payments
GBP 130m budget deficit (third of three)
Budget deficit after failed investments
GBP 1.2bn deficit from risky investments
GBP 87m deficit; equal pay liabilities
GBP 23m overspend projected
Unlawful payments into and out of the pension fund
Notices since 2022 highlighted. Source: Institute for Government Section 114 tracker and published council documents.15 councils have issued a notice since 1988 on the reconciled count used here.
Reserves as a share of spending, 2024 to 25
A proxy, not a verdict
The Revenue Outturn data allow a rough proxy for financial cushion: unallocated financial reserves plus other earmarked reserves as a share of net current expenditure at 31 March 2025. Across all 407 English local authorities with positive net current expenditure, the median is about 28.5 per cent. The most stretched authorities include Plymouth, where the combined figure is about negative 0.5 per cent (unallocated reserves are negative), and Hillingdon at about 0.7 per cent. Shropshire, West Berkshire and Cheshire East are each around 3.5 to 3.8 per cent. A low ratio means little buffer against an unexpected cost pressure. This is a proxy measure only: it does not capture contingent liabilities, borrowing, or ring fenced reserves that may be available in a crisis.
Most stretched authorities: usable reserves as a share of net current expenditure · 31 March 2025
Median across all 407 English LAs with positive net current expenditure: 28.5%. Source: MHCLG Revenue Outturn RS 2024 to 25.
Reserves to spend is a proxy, not an official financial health metric. Councils with negative unallocated reserves may have earmarked funds available; those with high ratios may still carry large off balance sheet liabilities. Oxford City, at approximately 0 per cent, is a district council and not directly comparable to unitary or county authorities on this measure.
Questions this raises
For local government finance policy
- 1.
The number of councils needing emergency government support rose from 30 to 37 in a single year, and from 19 three years ago. Is this a temporary cash flow problem or evidence of a permanent structural gap between council income and their legal duties?
- 2.
Section 114 notices have historically been extremely rare. Four were issued in 2022 and 2023 alone, and Barnet issued one in January 2025. What has changed in the funding settlement or cost environment to make this once in a generation event so frequent?
- 3.
Birmingham accumulated liabilities of several hundred million pounds from an Oracle IT project and equal pay claims before issuing a Section 114, then dropped off the EFS list for 2026 to 27 while its support for earlier years was revised down. How well does the current audit and oversight regime detect councils in trouble before they reach that point, and confirm when they have stabilised?
- 4.
Several councils appear on both the EFS list and the Section 114 list. Does receiving EFS reduce the pressure to cut services to the point where it delays necessary restructuring?
Sources & method
Data provenance
- Exceptional Financial Support guidance 2026 to 27 (MHCLG, published 23 February 2026, updated 30 July 2026) ↗
- Exceptional Financial Support guidance 2025 to 26 (MHCLG, published 20 February 2025) ↗
- Local government section 114 (bankruptcy) notices (Institute for Government explainer) ↗
- Barnet Council joint Section 5(2)(a) and Section 114(2)(a) report, 20 January 2025 ↗
- Revenue Outturn RS data by local authority 2024 to 25 (MHCLG, last updated 11 June 2026) ↗
Caveats & data notes
- This page covers England only. The EFS framework and Section 114 mechanism are English; devolved nations have different oversight arrangements and the data are not comparable.
- Section 114 notice counts are compiled from the Institute for Government tracker, cross checked against primary council reports. The Institute for Government's own explainer records 14 councils since 1988 as of its last update in August 2024; this page adds Northumberland County Council's 2022 notice, which the Institute for Government's text already counts within its 14 but which this page's dated list previously omitted, and Barnet's January 2025 notice, which postdates the Institute for Government's last update. That gives 15 councils on this page, one ahead of the Institute for Government's currently published figure.
- The reserves to spend proxy (unallocated plus other earmarked reserves divided by net current expenditure) is not an official distress measure. It excludes ring fenced reserves, HRA reserves, schools reserves and contingent liabilities. Use it as a rough indicator only.
- EFS amounts are loans, not grants, and do not necessarily reflect the full scale of a council's financial problem. Figures are published as agreed in principle and are sometimes revised in a later year's guidance; some EFS is Housing Revenue Account support (noted in the data).
- Birmingham was the largest single recipient of 2025 to 26 EFS at 180 million pounds but has no 2026 to 27 award: the gov.uk list only revises its support for 2020 to 21 through 2025 to 26 downward, so the city drops out of the current year total.
- The City of London Corporation appears in the 2026 to 27 EFS list as a separate 2.65 million pound Housing Revenue Account allocation, a different type of support from the general awards made to the other councils on the list.
- The 5 billion pound, 42 local authority figure for cumulative EFS since 2020 to 21 is drawn from Public Accounts Committee and Institute for Government commentary that predates the 2026 to 27 round; it has not been independently recomputed to add this latest round and should be read as a floor, not a current total.
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