Birmingham, UK’s 2nd Biggest City, Is Bankrupt

Britain’s second-biggest city effectively declared itself bankrupt on Tuesday, suspending all nonessential spending after being faced with equal pay claims totaling up to £760 million ($956 million), Rob Picheta and Catherine Nicholls reported.

The city anticipates having a deficit of £87 million ($109 million) for the 2023-2024 financial year.

Birmingham City Council, responsible for providing services to over one million people, filed a Section 114 notice on Tuesday, halting all spending except on essential services.

The deficit arose due to difficulties in paying between £650 million (around $816 million) and £760 million (around $954 million) in equal pay claims, as stated in the notice report. The city now anticipates having a deficit of £87 million ($109 million) for the 2023-2024 financial year.

Sharon Thompson, deputy leader of the council, informed councilors on Tuesday that they face "longstanding issues, including the council’s historic equal pay liability concerns," as reported by the United Kingdom’s PA Media news agency.

Thompson also partially attributed the situation to the UK’s ruling Conservative Party, claiming that Birmingham "had £1 billion of funding taken away by successive Conservative governments."

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