Birmingham city council effectively declares bankruptcy and stops all but essential spending
TOWN hall bosses at Birmingham City Council declared the local authority "effectively bankrupt" today.
Councillors issued a Section 114 notice, blocking all spending except on essential services.
In a joint statement bosses of the Labour town hall, which is the largest in Europe, said the notice was a "necessary step as we seek to get our city back on a sound financial footing".
Financial pressures are understood to be linked to a £760m bill for equal pay settlements.
There's also frustration over £46.5m needed to fix the council's IT system.
Council finance chiefs admitted they currently can't find money to deal with the claims.
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Tory Chairman Greg Hands blasted the town hall for failing to manage its money.
"My regular reminder that when Labour run something, they run it badly," he said.
"And once again, there is 'no money left' at Britain’s largest Council."
Council bosses John Cotton and Sharon Thompson said: "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.
"We implemented rigorous spending controls in July, and we have made a request to the Local Government Association for additional strategic support.
"Despite the challenges that we face, we will prioritise core services that our residents rely on, in line with our values of supporting the most vulnerable."
