THE West Midlands mayor, Andy Street, has hit out at Birmingham City Council’s leadership in a statement after the local authority admitted it is effectively bankrupt.
The city council announced on Tuesday (5) morning it could no longer balance its books and issued a Section 114 notice.
The deputy leader, Sharon Thompson, described the decision as a “necessary step to get us back on strong financial ground”.
An external audit has also shown the council is unlikely to generate savings and additional revenue “to mitigate the financial challenges” and it does not have the money to meet an £87 million deficit. The audit also highlighted concerns over the speed and effectiveness with which the council responded to “in year budget challenges” and the council’s ability to fix the issues.
In her opening address, Thompson noted the difficult circumstances of councils across the country, an unprecedented number of which have announced Section 114s, or are expected to in the near future.
However, the leadership has faced criticism from opposition parties with Tory leader Robert Alden claiming the cabinet was living in “cloud cuckoo land” to suggest the issues were not the result of its own failings.
Street said, “Today’s news from Birmingham City Council is deeply disturbing and raises serious questions about the council’s leadership and the decisions they have taken over the past decade.
“When the news of the equal pay bill – which according to reports has now spiralled to more than £1.1 billion – first broke, we were all assured by the council that despite the seriousness of the situation, they would produce a plan as to how they could settle the bill.
“I stood ready to support and help once that plan had been produced, irrespective of political colours. However, more than two months on, no plan has emerged.
“Instead, we are simply presented this morning with what is effectively a bankruptcy notice and an admission of defeat.
“The city of Birmingham deserves so much better, and, truthfully, I am concerned that citizens – and the services they rely on – have been let down in this way.
“It is no secret that local authorities up and down the country have faced significant cuts over the past decade (even if the funding from government has been improving in recent years), and it has been a real challenge to keep services running to the standard that people expect.
“I will work with ministers, government officials, and of course the City Council themselves to try and resolve this situation in a way that shields residents, their pockets, their services, and their futures.
“Finally, just because the city council is in this position does not suddenly mean that Birmingham is failing – indeed, far from it.
“We have made huge strides as a city and region in recent years, encapsulated by the Commonwealth Games last year.
“I would urge anyone looking to back Birmingham to reflect on our progress, and consider our world-class institutions, our innovative businesses, and the record amounts of investment being made.
“Birmingham remains firmly open for business. However bad today’s announcement, I will play my part to ensure the city gets through this.” (Local Democracy Reporting Service)
John Denham
