Members of the ruling Conservative group have also ousted Heather Smith as their leader, although she remains leader of the council.
Northamptonshire in early February became the first council to issue the first section 114 notice of its kind in 20 years, barring new spending on all but statutory services.
Anna Earnshaw, director of adult services, told a budget meeting yesterday that care was “severely underfunded” and “is on the edge of being unsafe”.
The council has proposed further budgets cuts after a warning from auditor KPMG that it had “begun to take a course of action which, if followed to its conclusion, would be unlawful” because of the way it intended to use capital receipts.
This has forced a full council meeting today, to consider a further round of savings totalling £9.9m including closing 21 small libraries, scrapping of all bus subsidies, cutting the trading standards budget by 42%, reducing councillor allowances and freezing staff pay during 2018-19.
Cabinet member for finance Robin Brown said: “Northamptonshire is at the leading edge of a financial challenge the severity of which local government has never seen before. It is a challenge all top tier authorities will face, but Northamptonshire has reached crisis point now.
“Faced with unprecedented demand for local services, above-average population growth and reducing funding from central government, we are now in a position where we must focus on safeguarding vulnerable people and statutory services.
“These revised budget recommendations have been brought forward in light of the advisory notice issued by KPMG last week and include service reductions we had hoped to avoid.”
A council statement explained the crisis in its social care operation as arising from it having the fastest growth in the numbers of people aged over 65 in the country but with one of lowest funded and lowest staffed social care operations.
Smith is likely to remain leader until May, unless she chooses to resign, despite being ousted as Tory leader.
A council spokesman said this was because opposition councillors had unsuccessfully proposed a motion of no confidence in her in November and standing orders barred two such motions within six months.
Communities secretary Sajid Javid in January appointed former Barnet and Hackney chief executive Max Caller to inspect Northamptonshire. He is due to report next month.
Javid told Parliament: “For some time there have been concerns about financial management and governance at Northamptonshire County Council, and in recent months a number of reports have been published, which have led me to question whether the authority is failing to comply with its best value duty.”
