Birmingham City Council has declared it does not have the resources to meet its financial liabilities by issuing a Section 114.Â
The move comes as the local authority faces a bill of up to £760 million to fund Equal Pay claims. With a current financial deficit of around £87m, this liability is unable to be met.
The notice means an immediate ban on all new spending, except to protect vulnerable people and statutory services.
Birmingham City Council statement regarding announcement made today (5th September 2023) that a Section 114 notice has been issued:
“Birmingham City Council has issued a s.114 Notice as part of the plans to meet the Council’s financial liabilities relating to Equal Pay claims and an in-year financial gap within its budget which currently stands in the region of £87m.
“In June the Council announced that it had a potential liability relating to Equal Pay claims in the region of £650m to £760m, with an ongoing liability accruing at a rate of £5m to £14m per month.
“The Council is still in a position where it must fund the equal pay liability that has accrued to date (in the region of £650m to £760m), but it does not have the resources to do so.
“On that basis the Council’s Interim Director of Finance, Fiona Greenway, (s.151 – Chief Finance Officer) 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 will tighten the spend controls already in place and put them in the hands of the Section 151 Officer to ensure there is complete grip. The notice means all new spending, with the exception of protecting vulnerable people and statutory services, must stop immediately.
“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.”
Read articles on the following:
- BBC News – Birmingham City Council declares itself effectively bankrupt
- The Guardian – Birmingham City Council effectively declares bankruptcy after being hit by £760m bill
- ITV News – Birmingham City Council bankruptcy: What does it mean for the city?
- Sky News – Birmingham City Council effectively declares bankruptcy after being hit by £760m bill
- Birmingham Live – Breaking – ‘Broke’ Birmingham City Council issues legal plea for Government intervention
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Get ready for council tax hikes.
The people striking for equal pay haven’t made the connection that the money has to come from somewhere.
(Sidenote: All tax is theft unless voluntary and the usage of said tax has been agreed upon with the payer.)
Get ready for some serious council tax hikes. The staff striking for equal pay don’t realise that the public (themselves included) will have to foot the bill for pay increases. Kind of selfish if you ask me.
(Side note: All tax is theft unless voluntarily agreed upon by the citizen and the usage of said tax has been specified and agreed upon with the people. Taxation by force is tyrannical and an infringement of the non agression principal and the inherent rights of the individual.)