The secretary of state for communities says he will now consider sending commissioners in to run Northamptonshire County Council after today's damning inspection report.
Government inspector Max Caller's verdict on the county council's ability to manage its own finances was released this morning.
The damning 50-page report points to a series of financial failures, which he claims started when the authority's children's services were branded inadequate in 2013.
Secretary of state for Housing, Communities and Local Government Sajid Javid will now consider whether to send in commissioners to effectively run the council - as recommended by Mr Caller.
In a statement issued to Parliament this morning (March 15) Mr Javid, said: "The inspector has identified that the Council has failed to properly comply with its Best Value duty for some time.
"This is not because of lack of funds: as the report states, the Council’s “Mind the Gap” analysis “does not demonstrate that NCC has been particularly badly treated by the funding formula."
Mr Javid pointed to a line in Mr Caller's report, where he states: "living within budget constraints is not part of the culture of NCC”.
"These findings appear very serious indeed both for the council and its residents," the statement continues.
"The inspector has made recommendations for how improvement can be secured, Mr Javid says.
He said: "He rules out the option of an internally led strategy and suggests that Commissioners should be appointed in the short term to ensure the proper running of the Council and delivery of services for its taxpayers, whilst proposals for restructuring are developed as a longer-term solution.
"I will now consider in detail their report’s findings and proposals for the future.
"I will make another statement to the House setting out my proposals for next steps, including whether or not to exercise my powers of intervention under section 15 of the 1999 Act, in due course."