What Happens When the Money Runs Out?

There are some interesting thoughts on a Council running out of money here.  Setting an illegal budget was raised in 2011 by a few people, but I think generally dismissed as a loony left option.  The main conclusion of the Localgovernmentlawyer piece is that Eric Pickles may find himself taking over Councils as they fall apart.  If so, he may come to regret driving local government into the ground, as it far harder to put back together a collapsed organisation than to keep a functioning going.