Britain Bankruptcy: This Uk City Has Declared Itself Bankrupt
(MENAFN- Live Mint) "Britain's second-largest city has reportedly declared itself bankrupt and has shut down all non-essential spending after being issued with equal pay claims totaling up to £760 million ($956 million).According to a report by CNN, the deficit arose due to difficulties paying between around $816 million and around $954 million in equal pay claims.Birmingham City Council said it has a shortfall of £87 million ($109 million) in the current financial year and also faces a“potential liability relating to equal pay claims in the region of £650 million to £760 million.”Sharon Thompson, deputy leader of the council said it faces“longstanding issues, including the council's historic equal pay liability concerns\". Thompson also blamed the ruling Conservative Party, saying Birmingham“had £1 billion of funding taken away by successive Conservative governments.”The Labour-run administration representing Birmingham issued a so-called 114 notice, putting a stop to all but essential spending and becoming the latest in a string of councils to plunge into financial distress.Sharon added while the council is facing significant challenges, the city is very much still open for business.Meanwhile, a spokesperson for UK Prime Minister Rishi Sunak said the responsibility for effective budget management lies on elected councils.Birmingham City Council's bankruptcy reason:One of the key reasons behind the city going bankrupt is the equal pay claim. The city's authority said it has been forced to pay out after a Supreme Court ruling in 2012 sided with a group of largely female employees who had missed out on bonuses that were given to staff in traditionally male-dominated roles at the council. It has already paid out more than £1 billion on the equal-pay claim and was also hit with costs from a new IT system.The council also blamed“unprecedented financial challenges,” including inflation, rising demand for adult social care, and“dramatic reductions” in income from business taxes.A Section 114 notice is issued by a council when it believes its income will not be able to meet spending. It is widely reported as effective bankruptcy for a council, meaning it cannot make new spending commitments. It often leads to a new budget with reduced expenditure.Birmingham is a multi-cultural city in Central England that also hosted last year's Commonwealth Games. It is scheduled to hold the 2026 European Athletics Championship.
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