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Britain's second largest city declares itself bankrupt

2023-09-06 07:57:00, Kosova & Bota CNA

Britain's second largest city declares itself bankrupt

Britain's second-largest city declared itself bankrupt on Tuesday, shutting down all expenses after it had equal pay claims totaling £760 million ($956 million).

Birmingham City Council, which provides services to more than a million people, lodged a Section 114 notice on Tuesday, banning all but essential services.

The deficit arose because of difficulties in paying between £650 million (about $816 million) and £760 million (about $954 million) in equal pay claims, the report said.

The city now expects to run a deficit of £87m ($109m) for the 2023-24 financial year.

Sharon Thompson, the council's vice-president, told councilors on Tuesday that it faces "long-standing issues, including the council's historic concerns about equal pay", according to UK news agency PA Media.

Thompson also partly blamed the UK's ruling Conservative Party, saying Birmingham "had £1bn of funding taken from successive Conservative governments".

"Local government is facing a storm," she said. "Like councils across the country, it is clear that this council faces unprecedented financial challenges, from huge increases in demand for social care for adults and dramatic reductions in business rates income, to the impact of inflation rampant."

"While the council is facing significant challenges, the city is still very much open for business and we are welcoming people as they come," she added.

A spokesman for UK Prime Minister Rishi Sunak told reporters on Tuesday: "It is clear that locally elected councils must manage their own budgets." The spokesman added that the government had "regularly engaged with them to this end and expressed concern about their governance arrangements and sought assurances from the council leader about the best use of taxpayers' money".

Council leader John Cotton told the BBC that a new working model will be brought to the council to tackle the equal pay bill.

The multicultural city is the largest in central England. It hosted last year's Commonwealth Games, a major sporting event for Commonwealth countries, and is slated to host the 2026 European Athletics Championships./ CNA





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