BIRMINGHAM, the United Kingdom‘s (UK) second-largest city, has plunged into financial turmoil after its city council announced its bankruptcy due to an equal pay settlement bill potentially reaching 760 million pounds or $956-M.
The crisis, rooted in a 2012 Supreme Court ruling favoring predominantly female council employees, has forced the city to cease all non-essential spending.
The equal pay settlement is estimated to be between 650-M and 760-M pounds or 816-M to $956-M, with monthly liabilities increasing at a rate of 5-M to 14-M pounds or 6.3-M to $17.5-M.
The Birmingham City Council conceded that it lacks the resources to cover this outstanding sum, prompting the imposition of strict spending controls.
This means that all new spending, except for support to vulnerable individuals and statutory services, will be halted.
Deputy Council Leader Sharon Thompson acknowledged long-standing issues, including the equal pay liability, and cited a £1-B or $1.25-B reduction in funding by successive conservative governments as a contributing factor.
Austerity measures may affect non-mandatory services like libraries, cultural projects, and infrastructure maintenance, raising concerns about the fate of the 2026 European athletics championships scheduled at Birmingham’s Alexander Stadium.
Meanwhile, the UK Prime Minister’s Office emphasized local councils’ responsibility for managing budgets.
Downing Street expressed concerns about governance arrangements and requested assurances from the council regarding taxpayer money’s reasonable use.
Local media estimate that at least 20 government bodies in the UK may go bankrupt over the next two years amidst a broader ongoing funding crisis.
