Just to demonstrate as clearly as possible that Sludge and Bob are incorrect.

List of councils who have declared s114 bankruptcy notices:

Birmingham (Labour)
Woking (Lib Dems)
Thurrock (Conservative)
Croydon (NOC)
Northumberland (Conservative)
Nottingham (Labour)
Slough (Labour
Northamptonshire (Conservative)

Like most issues that people like them usually present as such, it's not a party political issue. It's a complex and often unique set of scenarios