The council, having last week been made subject to a Section 114 notice which bars it from further spending, will hold an emergency meeting to discusses the state of the area’s finances and agree on a plan of action. This is likely to involve the appointment of professionals to examine spending patterns.

The meeting will discuss a budget recovery plan, including ‘extended controls on spending, including approval for all spend over £1,000’, the introduction of a co-ordinating group ‘to centralise decision-making in line with the council’s agreed spending priorities’, and the creation of a task force to identify areas where costs can be reduced.

Northamptonshire County Council, once touted as a prime example of a Conservative-run authority, has been obliged to make savings of £376m since 2010 due to significant cuts to government funding. Earlier this year, the council became insolvent after emptying its cash reserves to deal with unprecedented levels of overspend. Until recently, the council spent nearly 70% of its budget on contracts with third-party suppliers and outsourcing firms. After the overspend was formally identified, the government announced that commissioners would take charge of the local authority’s operations until March 2021.

County council leader Matt Golby said: ‘Unfortunately there are going to be some very difficult decisions ahead for Northamptonshire as we work hard to bring our spending under control while doing our very best to protect services for the most vulnerable in our communities.

‘This action plan outlines the approach we are going to take, which includes rigorous controls on spending, recruitment and contracts. These decisions will be made based on the core spending priorities discussed by Full Council yesterday.

‘These are incredibly challenging times for the council but I am committed to ensuring we deliver those core services within the money we have available.’

The squeeze on Northamptonshire’s finances is part of a wider trend, prompted by the government’s austerity response to the financial crisis of 2008 and its desire to cut the deficit. Since 2010, councils have seen their central government funding cut by 49.1% in real terms, as well as a 28.6% drop in council tax and other revenues in the same time period.

David Phillips, Associate Director of the Institute for Fiscal Studies, sees this as a growing issue: 'Councils' spending on local services is down by 24% per person since 2009-10 after accounting for inflation. But their revenues have fallen even further as ongoing cuts to grants from Whitehall bite. That means increasing numbers are having to draw down reserves to help pay for services - which isn't sustainable for the long term. That's particularly true for the councils with social care responsibilities, where demand is rising and councils have a real duty of care. On the other hand, smaller district councils in our shire areas seem to be doing rather better - still often paying into reserves.