Birmingham Declared Itself Effectively Bankrupt

News Desk

Islamabad: The Birmingham City Council, England, which is Europe’s largest council, has declared itself effectively bankrupt.

According to the BBC report, the Birmingham Council financial officer issued a notice of insolvency of the council under Section 144 of the Local Government Finance Act 1988.

The Section 114 notice means any council can issue a notice of bankruptcy when it has judged itself to be in financial distress and is unable to raise the required amount for expenditure to balance its budget.

The notice issued said the council had to bear an additional burden of $1 billion this financial year due to giving male and female civil servants the same pay and benefits.

The Birmingham administration was ordered by the Supreme Court of Great Britain to give equal pay to all civil servants, meaning that men and women in every position should be paid the same regardless of their gender.

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Previously, there was a significant pay gap between men and women in a number of local government bodies in Birmingham. After the council’s bankruptcy notice, local authorities will no longer spend money on anything other than vital services.

According to the management, the council will now not spend any money on any new projects except for the most essential emergency relief works, including health, education and sanitation, for several months, but the employees will continue to be paid equal salaries.

Birmingham is the second-largest city in the United Kingdom after London in terms of population and tax collection. It has a population of over 200 million and a tax payer population of around 10 million.

Birmingham City Council hopes to reduce its financial losses to less than $100 million by the next financial year after the administration declared bankruptcy.

It should be noted here that the British Government has nothing to do with the Birmingham Council declaring itself bankrupt; neither the Central nor the State Governments will be affected.

Before Birmingham, in November and December 2022, two councils Croydon and Thurrock in the British state of England had declared themselves bankrupt, of which a suburban council in London had gone bankrupt for the third time in a row.