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Birmingham City Council serves over one million people.
London
CNN
—
Britain’s second-largest city on Tuesday effectively declared bankruptcy and halted all non-essential spending after receiving equal pay claims totaling up to 760 million pounds ($956 million).
Birmingham City Council, which serves more than one million people, on Tuesday submitted a section 114 notice suspending spending on all but essential services.
The deficit was caused by difficulties in paying equal pay claims of between 650 million pounds (about $816 million) and 760 million pounds (about $954 million), the notification report said.
The city now expects a deficit of £87 million ($109 million) in 2023-24.
According to Britain’s PA media news agency, the council’s deputy chair Sharon Thompson told councilors on Tuesday that they were facing “long-standing issues, including the council’s historic equal pay liability concerns”. Ta.
Mr Thompson also blamed some of the blame on the Conservative Party, saying Birmingham had “lost £1 billion of funding from successive Conservative governments”.
“Local governments are facing a perfect storm,” she says. “It is clear that this council, like councils across the country, faces unprecedented financial challenges, including a significant increase in demand for adult social care and a dramatic fall in business rate income. This is the result of severe inflation. ”
“While the city council faces significant challenges, the city remains open and welcoming people to visit,” she added.
British Prime Minister Rishi Sunak’s spokesperson told reporters on Tuesday: “It’s clear that local elected councils will manage their own budgets.” The spokesperson said the government “regularly engages with the government to that end, raising concerns about its governance structure and providing assurances to the council president about the best use of taxpayers’ money.” I’m looking for it,” he added.
Council leader John Cotton told the BBC elsewhere that a new employment model would be introduced at the council to tackle the equal pay bill.
This multicultural city is the largest in central England. Last year it hosted the Commonwealth Games, the major sporting event for Commonwealth countries, and will host the European Athletics Championships in 2026.