Local leftist officials have been blasted for mismanagement in Birmingham as the city council has declared that it is effectively bankrupt.
In the latest example of a Labour Party-run area running out of money, Birmingham City Council issued a spending freeze Section 114 notice, meaning that the local government of England’s second-largest city will only be able to dole out funds to maintain core services.
The decision was made after the council failed to settle a bill that it owed to settle equal pay claims following a lawsuit from 174 female council workers, who successfully sued the local government for failing to provide bonuses to traditionally female jobs such as cooks and cleaners while offering bonuses to jobs typically staffed by men such as gravediggers, trash collectors, and street cleaners.
While the council has paid out nearly £1.1 billion in equal pay claims since the 2012 decision, it still has £760 million in outstanding debts. The council also pointed to failures of the Oracle IT system that the government hoped would save costs on data management and payment processing but has instead faced years of delays and run a bill of upwards of £100 million in costs — five times the original budget for the system.
In a statement, the council said per The Telegraph: “Today’s issuing of a Section 114 Notice is a necessary step as we seek to get our city back on a sound financial footing so that we can build a stronger city for our residents.”
Labour Party councillors John Cotton and Sharon Thompson added: “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.”
The excuses for the fiscal failure did not convince the opposition, however, with the leader of the Conservative Party on the Birmingham City Council, Robert Alden saying that the Labour-run government had “failed to show the proper speed and urgency needed to tackle equal pay”.
“Labour’s failure in Birmingham has become clear for all to see, what Labour pledged was a Golden decade ahead to voters in 2022 turns out to be based on budgets in 20/21 and 21/22 that did not balance and were unfunded.
“Combined with Birmingham Labour’s refusal to deal with equal pay over the last decade this has created this mess where residents will now lose valuable services and investment.”
Michael Fabricant, the Tory MP for the Birmingham suburb of Lichfield, said: “I think the Cabinet should all resign over this fiasco.
“It’s been going on for eight or nine years and it’s the inevitable conclusion of a collective burying heads in the sand. What gets me is the utter hypocrisy of a Labour council exploiting women like this.”
It is not the first time that a Labour Party-run local government has run out of money in recent years, with the Croydon Council in London declaring effective bankruptcy last year for the third time over a two-year period after wracking up a “toxic debt burden” of over a billion pounds.
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