How Local Government Crisis Struck Wider UK Finances: Explained

For the first time ever, the UK’s public spending watchdog refused to sign off on the government’s annual financial accounts in November, blaming chaos among England’s local authorities.

More than one-third of UK local governments are facing severe financial difficulties, with some at risk of going bust and most lacking audits of their accounts, research has shown.

So many local authorities have failed to submit their financials on time that the National Audit Office didn’t have enough information to give an opinion on overall public-sector accounting accuracy. In an attempt to reduce the backlog, the UK government set a Dec. ...