‘Bankrupt’ Birmingham City Council approves finance plan

Birmingham City Council’s leader said councilors faced “tough choices” after approving a financial recovery plan.

The authority declared itself effectively bankrupt earlier this month over a £760m equal pay bill.

During Monday’s four-hour, often difficult meeting, lawmakers took turns asking how Europe’s largest authority arrived at this position.

In the end, they voted to approve four recommendations.

Those include accepting a Section 114 notification, essentially acknowledging that Congress’ spending commitments exceed revenue. Agree on measures to contain spending until a new budget is passed. Support actions to address financial pressures. It will receive further reports and an emergency budget next month.

Birmingham City Council is facing an £87m budget shortfall, blaming equal pay as well as the introduction of a new IT system whose expected cost has spiraled from £19m to £100m. .

Amid concerns about future job cuts, union representatives rallied outside the conference to show support for workers.

Within the city council, chief financial officer Fiona Greenway briefed councilors on their role, telling them that the city was facing “unprecedented financial challenges”.

A report on the turnaround plan presented to the meeting said: “Work to address the situation must be urgent and involve difficult choices about what to deliver and how to operate, resulting in the organization shrinking. I will do it,” he said.

However, further decisions will be needed as details are developed, and a subsequent report and revised emergency budget for this year will be presented at another special general meeting in late October, it said.

Council leader John Cotton apologized to residents and staff, saying they had been forced to make “such tough choices”.

He said local authorities must take “decisive” action to resolve the issue of equal pay “once and for all”, adding that councils were also affected by funding cuts from central government.

He said the decision facing the council was “not what any of us wanted”.

Mr Cotton said he had not “underestimated” the scale of the challenge ahead, adding: “We are determined to see this through.”

But in response, Conservative councilor Matt Bennett said the impact of the crisis would be devastating and said the vote was just “planning for the sake of planning”.

“When I heard the response from our leaders today, one thing stuck with me and I can’t believe it,” Bennett said.

But council chief executive Deborah Cadman told the meeting the financial plan would help restore “certainty and confidence” in the authority’s ability to deal with the problem.

“Our efforts to implement the recovery plan are urgent,” she said. “There will almost certainly be a different organization.”

But it also offered the council an opportunity to improve its performance, she said.

Liberal Democrat councilor Paul Tyldesley said councilors were facing “probably the worst crisis” in local government history.

“We’ve got the Four Horsemen of the Apocalypse, and I see that as asset sales, layoffs, service cuts and city tax increases to pay for it,” he said.

Tory opposition group leader Councilor Robert Alden said this summer that there had been a “disgraceful amount of inaction” by the party leadership to deal with its financial problems, adding that Labor has historically been on the equal pay issue. He criticized how the situation had been handled.

The equal pay argument stems from a 2012 Supreme Court ruling that found hundreds of mostly female employees were not receiving bonuses given to workers in traditionally male-dominated roles such as garbage collectors and street sweepers. dates back to

Despite the current position, Mr Alden insisted this was a city council issue and that Birmingham itself had a “bright future” and would rise “like a phoenix” from its difficulties.