Birmingham City Council has declared itself effectively bankrupt and will only allow spending on core services.
The council has issued a Section 114 notice that prevents all but essential spending.
In a statement, the local authority said: "The Council will tighten the spend controls already in place and put them in the hands of the Section 151 Officer to ensure there is complete grip. The notice means all new spending, with the exception of protecting vulnerable people and statutory services, must stop immediately.
A spokesman said: "Birmingham City Council has issued a s.114 Notice as part of the plans to meet the Council’s financial liabilities relating to Equal Pay claims and an in-year financial gap within its budget which currently stands in the region of £87m. "The Council is still in a position where it must fund the equal pay liability that has accrued to date , but it does not have the resources to do so.
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