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BREAKING: Labour-Run Birmingham Council Declares Itself BANKRUPT



Labour-run Birmingham City Council, the largest local authority in Europe, has officially declared bankruptcy, with the finger of blame being pointed squarely at its councillors.

The council has previously issued a Section 114 notice that forbids all spending except from on necessities.

Birmingham declared an unofficial spending restriction in June after disclosing a £750 million debt to resolve equal pay claims.

Conservatives have criticised Labour for their inaction on the equal pay bill, which is the equivalent of the whole annual service budget of the council. The council has stated that they will have to reprioritize what they spend tax dollars on as a result of the measure – however, the Labour cabinet appear to be trying to divert blame with a bizarre reason for their own incompetence.

In their statement, Labour councillors John Cotton and Sharon Thompson, leader and deputy leader respectively, said the authority was facing financial pressures due to issues with the implementation of its Oracle IT system.

Labour Councillor and Birmingham Council leader John Cotton.

Labour Councillor and Birmingham Council leader John Cotton.

The flagship system, intended to streamline council payments and HR systems, was set to cost £19m, but after three years of delays it was revealed in May it could cost up to a whopping £100m.

“Like local authorities across the country, it is clear that Birmingham City Council faces unprecedented financial challenges, from huge increases in adult social care demand and dramatic reductions in business rates income, to the impact of rampant inflation,” Mr Cotton and Ms Thompson said, adding local government faced “a perfect storm”.

The statement continued: “We implemented rigorous spending controls in July, and we have made a request to the Local Government Association for additional strategic support.

“[Tuesday’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.

“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.”

Birmingham City Council has paid out almost £1.1bn in equal pay claims since a landmark case was brought against the authority in 2012.

The Supreme Court ruled in favour of 174 mostly female employees – working in roles such as teaching assistants, cleaners and catering staff – who had missed out on bonuses which were given to staff in traditionally male-dominated roles such as refuse collectors and street cleaners.


Opposition leader, Robert Alden, said the council had “failed to show the proper speed and urgency needed to tackle equal pay”.

“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,” he added.

Birmingham has been a hive of controversy under the local ruling Labour Party. From councillors recently being slammed by a judge for writing fake character references for criminals, to allegations of bullying and corruption, the city has been blighted by continuous scandal. You can read more about those scandals here.




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