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Birmingham City Council 'effectively bankrupt'

Sep 5,2023 6:01 am

By Sophie MaddenBBC News, West Midlands

Birmingham City Council has declared itself effectively bankrupt.

The Local Authority - The largest in Europe - has issued a Section 114 notice preventing all but essential spending to protect core services.

The pressures have been linked to a

In a joint statement, The leader and deputy leader of The Labour Authority said The notice was a " necessary step as we seek to get our city back on a sound financial footing".

Such a notice, issued in The Past by councils including and, means a local Authority judges itself to be in financial distress and can no longer balance its budget.

Opposition leader, Robert Alden , Conservative, said The Council had " failed to show The proper speed and urgency needed to tackle equal pay".

In their statement, councillors John Cotton and Sharon Thompson , leader and deputy leader respectively, said The Authority was also facing financial pressures due to issues with The implementation of its

" Like local authorities across The country, it is clear that Birmingham City Council faces unprecedented financial challenges, from huge increases in adult social care demand and dramatic reductions In Business rates income, to The impact of rampant inflation, " they said, adding local government faced " a perfect storm".

The Statement continued: " We implemented rigorous spending controls In July , and we have made a request to The Local Government Association for additional strategic support.

" [Tuesday's] issuing of a Section 114 Notice is a necessary step as we seek to get our city back on a sound financial footing so that we can build a stronger city for our residents.

" Despite The Challenges that we face, we will prioritise core services that our residents rely on, In Line with our values of supporting The Most vulnerable. "

The Authority said its bill over equal pay claims was increasing at a rate of £5m to £14m per month.

It said it was in a position where it must fund The Liability accrued to date but it did not have The resources to do so.

Because of The Situation , it added, The Council 's interim director of finance, Fiona Greenway, had issued The Section 114 notice, which confirmed there were insufficient resources to meet The equal pay expenditure and there were No Other means of meeting The Liability .

The leaders' statement said: " The Council 's senior officers and members are committed to dealing with The financial situation and when more information is available, it will be shared. "

What is a Section 114 notice?

(Source: )

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Source of news: bbc.com

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