Nottingham Council has been slapped down by the head of a new local government watchdog, which said that councils are going bankcrupt because of poor financial management not a lack of money.
Nottingham Council, which declared effective bankruptcy earlier this year, cited the impact of inflation as a cause.
It also blamed increased demand for children's and adults' social care and rising homelessness.
But Lord Morse, chairman of the Office for Local Government (Oflog) said he could say "quite definitely" that all councils currently in special measures had seen failures in governance.
Nottingham Council has been slapped down by the head of a new local government watchdog
PA
He said this was primarily responsible for their budgetary shortfalls.
Morse said there is "a lot to be done" to improve the way in which councils manage their finances.
He said: "All of the failures that we’ve seen so far; all of the authorities that are in special measures are not primarily attributable to a shortage of money — they’re to do with failures in management or failures in governance.
“I really can say that quite definitely.
"So, while I listen respectfully to the concerns about money, and I’m not surprised that people feel that way, our actual experience is there’s a lot to be done in improving the quality of management and oversight.”
Morse added: "There have been substantial economic pressures that have affected everyone in the country, including local government.
"They all say they feel some degree of pressure [and] I recognise there’s a fair amount of reason for it at the present time.
"So we’re not unsympathetic to that — but you have to be realistic. There’s a limited amount of support that they can expect to get from the centre."
Nottingham Council declared itself effectively bankrupt, issuing a Section 114 notice, in November.
Such a notice prevents all spending apart from on essential services.
A recent report said the Labour-run council was set for a £23 million overspend in the year 2023-24.
LATEST DEVELOPMENTS:
Nottingham City Council’s chief finance officer declared that the council is unable to deliver a balanced budget, which is a legal requirement.
Nottingham is the sixth council in three years to effectively declare itself bankrupt