Birmingham, Britain’s second largest city, has declared itself bankrupt
New Delhi: Local authorities operating Birmingham, Britain’s second-largest city, have focused on maintaining critical services as they have decided to effectively declare the council bankrupt due to an annual budgetary shortfall of millions of pounds.
Birmingham City Council is run by the opposition Labour Party and is the largest local authority in Europe.
It consists of more than 100 councillors. The council issued a notice under Section 114 on Tuesday, stating that all new expenditures, with the exception of protecting vulnerable people and statutory services, will cease immediately.
The council said the dire financial situation arose because it would have to finance between 650 million pounds and 760 million pounds in terms of ‘equal pay liability’, but it did 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 equal pay expenditures and is currently required to meet this obligation,” the council statement said.