Birmingham City Council has effectively declared itself bankrupt as it says it will not stop all but essential spending.

Europe’s largest local authority has issued a Section 114 notice - which means it will spend only to protect core services.

In a statement, the council’s Labour leadership said the action was a “necessary step as we seek to get our city back on a sound financial footing”.

Previous 114 notices have been issued in the past by financially distressed councils such as Croydon and Thurrock. It means a local authority cannot balance its budget and is effectively bankrupt.