The council also criticised the fact it had “had £1bn of funding taken away by successive Conservative governments”. On top of this, the council leader confirmed earlier this year that problems with a new IT system being rolled out across the council would cost up to £100m to fix. Thousands of women employed by the council were granted compensation in 2014 after a successful equal pay claim in which they argued they had missed out on bonuses awarded to men on the same paygrade, with claims stretching back several years. In June, the council revealed it had paid out £1.1bn in equal pay claims over the past decade, and had a current liability of £650-750m, accruing at a rate of £5m to £14m a month. It is cloud cuckoo land to claim the problems in Birmingham are being replicated across the country,” he said.Ī section 114 notice, issued in the past by cash-strapped councils including Croydon and Thurrock, means no new expenditure is permitted, with the exception of protecting vulnerable people and maintaining statutory services. “This administration claimed that under Labour Birmingham was facing a golden decade. In a council meeting on Tuesday morning, Robert Alden, the leader of the Conservative opposition, accused the council of “lying to the people of Birmingham”. The council last year published a financial plan described as a “bold budget” designed to “maximise the potential of a golden decade for the city”, ahead of the arrival of the Commonwealth Games that took place in Birmingham last summer. He acknowledged Birmingham had a “particular issue around equal pay settlements” and said ministers had “commissioned an independent governance review which will report in the coming weeks”. He added that “clearly it’s for locally elected councils to manage their own budgets”, and that the government had expressed concern about “their governance arrangements and has requested assurances from the leader of the council about the best use of taxpayers’ money”.
The prime minister’s official spokesperson said: “The government for its part has stepped in to provide support, an additional £5.1bn to councils in 23-24, which is more than a 9% increase for Birmingham city council.” In a statement, the leader and deputy leader of the Labour-run council, John Cotton and Sharon Thompson, said: “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, it is clear that local government is facing a perfect storm.”ĭowning Street acknowledged that the council declaring itself to be in financial distress would be “concerning” for residents. The council said “it does not have the resources” to fund its equal pay liability, and has a gap in its current budget of £87m.
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