Birmingham City Council, the local government body of Britain’s second-largest city, effectively declared bankruptcy on Tuesday because it did not have enough funds to pay the £760 million ($955 million) equal pay claims it owed to female government employees. In the past, they were paid less than men.
The Council, the largest local authority in Europe, has issued a Section 114 notification Cut all non-essential spending, announcing an 87 million pound ($109 million) deficit for the current financial year.
In a statement, Birmingham City Council said: “Council does not have sufficient resources to meet equal pay expenditures and there is currently no other way to meet this responsibility.”
“The notice means that all new spending, except for vulnerable and statutory services, must stop immediately.”
In 2012, the Supreme Court ruling in favor of the case A group of predominantly female staff who do not receive bonuses for traditionally male-dominated positions on Birmingham City Council.
Birmingham City Council says June It has paid out 1.1 billion pounds ($1.4 billion) in equal pay claims over the past decade, but still has some remaining claims that are expected to cost between 5 million pounds ($6.3 million) and 14 million pounds ($17.6 million). The ratio accumulates. million) a month.
“This is one of the greatest challenges the committee has ever faced and we apologize for failing to control the situation,” the committee said at the time, adding that it was in talks with external auditors to find a possible solution .
Councils are usually funded from central government grants, parking services and taxes.
A spokesman for Prime Minister Rishi Sunak’s office reportedly said “it is up to the locally elected councils to manage their own budgets” but said the government would provide councils worth 51 billion dollars this financial year. billion pounds ($6.4 billion) in additional support. protector.Sunak has previously ruled out possibility of rescueaccusing Birmingham leaders of mismanaging funds.
Birmingham joined other cash-strapped councils including Woking, Croydon and Thurrock in declaring bankruptcy.While the council plans to protect vulnerable groups from this austerity measure, councils elsewhere have travel by walking In the past, taxes were used to prop up finances.
The funding gap for local authorities in England and Wales is expected to climb to £2bn ($2.5bn) or more in the 2023-24 financial year, according to political groups Local Government Association.
As well as huge bills settling equal pay claims, City of Birmingham authorities They also face financial challenges due to inflation and increased social care costs.The city also hosts major events such as the 2022 Commonwealth Games and has implemented new IT system, which further increases the financial pressure.At the same time, the council has invested in regeneration projects that have boosted the tech sector and placed Birmingham among the best performer city economy.
A representative of the council is redirected wealth It issued a statement on Tuesday when asked for comment.
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