All new spending, besides necessary providers such because the safety of weak folks, has been ceased in Birmingham
Birmingham, the most important metropolitan space within the UK outdoors of London, has successfully declared itself bankrupt as its metropolis council shut down all non-essential spending after being hit with a possible $956 million equal pay settlement invoice.
In an announcement on Tuesday declaring itself as being in monetary misery, Birmingham Metropolis Council stated it would “tighten the spend controls already in place” and appoint an exterior administrator to supervise short-term fiscal planning.
“In June, the council introduced it had a possible legal responsibility regarding equal pay claims within the area of £650m to £760m ($816m to $956m), with an ongoing legal responsibility that’s accruing at a charge of £5m to £14m ($6.3m to $17.5m) monthly,” the assertion stated.
It added that the council “doesn’t have the assets” to pay the excellent sum however is “dedicated to coping with the monetary scenario.” The physique additionally stated that each one new spending is to be ceased, besides assist to weak folks and varied statutory providers.
The settlement invoice stems from a 2012 Supreme Court docket ruling in favor of predominantly feminine Birmingham Metropolis Council staff who complained that bonus scheme funds had been primarily issued to workers in roles primarily occupied by males.
On Tuesday, deputy council chief Sharon Thompson stated that the Labour-run group is going through “longstanding points, together with the council’s historic equal pay legal responsibility issues.” She added that the council “had £1 billion ($1.25bn) of funding taken away by successive Conservative governments.”
A spokesperson for UK Prime Minister Rishi Sunak responded that “clearly it’s for regionally elected councils to handle their very own budgets.” Sunak’s workplace added that Downing Avenue had “expressed concern about their governance preparations and has requested assurances from the chief of the council about the most effective use of taxpayers’ cash.”
The finances cuts may have an effect on providers that the council just isn’t certain by regulation to take care of, together with libraries and cultural tasks and the upkeep of roads and parks. The dire monetary scenario may additionally impression the 2026 European Athletics Championships, that are as a result of happen at Birmingham’s Alexander Stadium.
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