What happens to development plans when a council goes ‘bankrupt’?


When a section 114 ‘bankruptcy’ notice is put in place, a council’s non-statutory services are restricted and housebuilding ‘goes to the back of the queue’. Yet the growing number of councils in this situation are finding ways to carry on building

What happens to a local authority when it gets into deep financial trouble and its income can no longer meet its expenditure commitments?

There comes a point when local authorities in this precarious position have to issue a dreaded section 114 (s114) notice. These notices, usually referred to in the media (not accurately technically) as “bankruptcy” notices, restrict investment in non-statutory projects until the council’s finances are on a firmer footing. 

And councils are issuing these notices in growing numbers. Since 2017, a spate of local authorities have issued s114s, including Northamptonshire, Croydon, Slough, Nottingham, Northumberland and Thurrock. In June this year, Woking Borough Council issued an s114 notice, while Birmingham City Council followed suit in September.

Already registered? Login here

To continue enjoying Building.co.uk, sign up for free guest access

Existing subscriber? LOGIN


Stay at the forefront of thought leadership with news and analysis from award-winning journalists. Enjoy company features, CEO interviews, architectural reviews, technical project know-how and the latest innovations.

  • Limited access to building.co.uk
  • Breaking industry news as it happens
  • Breaking, daily and weekly e-newsletters

Get your free guest access  SIGN UP TODAY

Gated access promo

Subscribe now for unlimited access


Subscribe to Building today and you will benefit from:

  • Unlimited access to all stories including expert analysis and comment from industry leaders
  • Our league tables, cost models and economics data
  • Our online archive of over 10,000 articles
  • Building magazine digital editions
  • Building magazine print editions
  • Printed/digital supplements

Subscribe now for unlimited access.

View our subscription options and join our community