(Bloomberg) -- Prime Minister Rishi Sunak’s hometown is among a fresh wave of UK town halls seeking government approval for emergency financial support in a last-ditch bid to avoid bankruptcy.

Southampton City Council applied to the government for “exceptional financial support” last week, a move that could buy it more time to avert the bankruptcies that caused crises at Birmingham, Nottingham and Woking, a person familiar with the matter said. 

It is seeking a capitalization direction that allows councils to fund day-to-day spending from their capital resources, including borrowing and asset sales. Somerset, where the Liberal Democrats took control from the Tories in council elections in 2022, Bradford and Middlesbrough are also among those in the process of making similar requests to help stave off a section 114 notice effectively declaring bankruptcy

While officials expect only a small number of councils to issue a section 114 notice, they do expect more to go down the EFS route, according to a person familiar with the matter. A number of councils used this route after being squeezed in the pandemic.

“We’ve been absolutely clear that we will do everything we can to avoid a 114,” Bill Revans, leader of Somerset Council, said in an interview. “We can’t avoid it certainly without a capitalization direction and it would also be really helpful to bring our council tax up to the national average.”

Sunak’s goverment has moved to help councils with a £64 billion funding package, which it said was a 6.5% real-terms increase.

“Councils are ultimately responsible for their own finances, but we remain ready to talk to any concerned about its financial position,” a spokesperson for the government said in a statement.

There are concerns within the sector that the crisis in local government finances is spreading from councils that have been badly managed to those facing unsustainable funding pressures.

Sunak — who was born and raised in Southampton where his mother ran a pharmacy — has blamed mismanagement for the troubles at Woking, Nottingham and Birmingham. However, it will be more difficult to distance the government from the crisis if it spreads to councils where there is no clear failure from the council leaders.

Pollsters have said the crisis at local councils may have ramifications in certain seats at the general election, which is expected in the second half of this year. Somerset includes Conservative seats which will be among the top targets for the Liberal Democrats at a national vote.

Council budgets have been squeezed by real-terms cuts to grants from central government, high inflation and soured investments on commercial property. A survey by the Local Government Association found that one in five councils believe they are fairly or very likely to issue a section 114 notice this year or next.

The councils that issued section 114 notices last year are now being forced to make major cuts to public services to help shore up their finances.

Bloomberg reported earlier this month that the government is considering proposals to loosen the rules on using asset sales to help meet pressures on day-to-day spending.

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