Birmingham City Council effectively files for bankruptcy
Birmingham City Council has effectively filed for bankruptcy, according to on-going reports.
The council, which has been hit with a £1bn equal pay bill, had already announced a freeze on non-essential spending.
It has issued a Section 114 notice – an admission that it cannot manage its catastrophic financial crisis without help, reports ITV.
In a statement, the council said: “Today’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.”
It adds: “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 council had appointed new advisers and commissioned reviews earlier in July this year, to look into the root causes of its financial issues, said the ITV report.
In a statement, the council said: “Today (Tuesday 5th Sept) the Labour Administration at Birmingham City Council have published a section 114 notice stating the Council’s general fund is in a negative position due to the costs of Equal Pay, and that the Council has insufficient resources to meet expenditure and the is not currently able to agree a solution that will allow suitable funding or financing to be obtained for this liability.
Leader of the Opposition Cllr Robert Alden said: “Labour’s failure in Birmingham has become clear for all to see, what Labour pledged was a Golden decade ahead to voters in 2022 turns out to be based on budgets in 20/21 and 21/22 that did not balance and were unfunded.
“Combined with Birmingham Labour’s refusal to deal with equal pay over the last decade this has created this mess where residents will now lose valuable services and investment.”