Birmingham is threatened with financial collapse

Birmingham is in serious financial need - and cannot meet its payments. The BBC speaks of a de facto declaration of bankruptcy.

The city government of the second largest city in the United Kingdom is in financial difficulties. As British media reported on Tuesday, Birmingham City Council pulled the emergency brake with a measure halting all non-essential spending.

This is to ensure that basic tasks can continue to be guaranteed, according to the reports.

According to the BBC, the move amounts to a declaration of bankruptcy. With a population of 1.14 million, Birmingham is the second largest city in Great Britain after London.

A statement from the Labor Party-led administration said the city was facing unprecedented financial challenges, according to the BBC. These included significant additional spending on adult care and a drop in income from business taxes and high inflation. “It’s a necessary step as we try to put our city back on a solid financial footing,” the Guardian said in a statement.

“Perfect Storm”

The payment crisis is a “perfect storm” of various factors. The city government is also facing claims in the hundreds of millions from mostly female employees who claim they have been paid less than their male colleagues for years.

According to the Guardian, last year the city government published a financial plan that was described as “brave” and intended to unleash “the potential of a golden decade for the city”. Nothing remains of the golden decade. The Conservative Party accused the Labor-dominated city council of having drawn up the financial plan without a solid basis.

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