LONDON: Birmingham, Britain’s second largest city, has effectively declared itself bankrupt, shutting down all non-essential spending after being issued with equal pay claims totaling up to ($956 million).
Birmingham City Council, which is run by the Opposition Labour Party and is the largest local authority in Europe comprising over 100 councillors, issued a Section 114 notice on Tuesday to say that all new expenditures with the exception of protecting vulnerable people and statutory services will stop immediately.
The council said the dire financial situation arose as it must fund an “equal pay liability” that has accrued to date in the region of GBP 650 million to GBP 760 million, but it does not have the resources to do so.
“On that basis, the Council’s Interim Director of Finance, Fiona Greenway, has issued a report under section 114(3) of the Local Government Act, which confirms that the Council has insufficient resources to meet the equal pay expenditure and currently does not have any other means of meeting this liability,” the council statement reads.