Somerset, Norfolk and Lancashire county councils are showing similar signs of financial stress as crisis-hit Northamptonshire, research by The Bureau of Investigative Journalism has found.

These findings come as the National Audit Office (NAO) reveals that one in ten local authorities could run out of reserves within the next three years. In response, Meg Hillier, MP for Hackney South & Shoreditch and chair of the Public Accounts Committee, said many councils were relying on “rainy day funds” to pay for vital services.

While the NAO report does not identify individual councils, the Bureau found Somerset, Norfolk and Lancashire, which provide services to 2.6 million people, are exhibiting some of the warning signs that concerned auditors at Northamptonshire in the years leading up to its financial collapse in February. The Bureau previously reported that Surrey has even greater financial issues, thus identifying a total of four county councils showing crisis signs so far.

Rob Whiteman, chief executive of The Chartered Institute of Public Finance and Accountancy, said: “Through my own conversations with chief financial officers, I have heard a number of warnings that councils may soon face untenable budget positions.”

He added: “The warning signs have been plain to see for a number of years.”

The Bureau identified these county councils after applying stress tests - based on concerns auditors raised at Northamptonshire - to all English councils responsible for social care.

One of the key tests is a sharp fall in “rainy day funds” - the usable reserves that can be used to balance the council’s books. The Bureau also found that 22 councils had reduced these reserves by more than 50% in the last five years.

The county councils named by the Bureau

Somerset’s usable reserves fell by 60% in five years. Like the other councils in our list revealed today, Somerset shows multiple indicators of financial worry. The authority also spent more than it budgeted for on children’s and adult social services in each of the last three financial years. Its overall budget this year is projected to be £7.7m in the red, including a £14.6m overspend on children’s services - the biggest such deficit in the country.

The council’s latest cost-cutting measures include closing two-thirds of the county’s children’s centres. “These are very challenging financial times for all local authorities,” a council spokesperson said.

Norfolk’s usable reserves halved during the same period and analysis of financial records published by the government show the authority spent more than it budgeted for in each of the last three financial years, and it is set to do so again this year. It is also slashing funding for children’s centres. The authority denied it had a history of overspending, adding that its budget strategy was “robust and prudent”.