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Questions begin to arise as to how exactly Birmingham the city council has fallen into financial crisis and whether the numbers behind its problems really add up.
Here is a brief summary of how the events unfolded.
April 2022 – The council’s new IT system, its first major upgrade since 1999, went live. Counselors say IT officials warned the system was not fully tested and had bugs. Problems are quickly materializing but council officers say they are being resolved.
April 2023 – The council’s then chief executive, Deborah Cadman, emailed all councilors to say the IT transition was not going as smoothly as expected and had affected finance and HR operations. A task force is being set up to deal with the problem.
June 2023 – The council says it faces an equal pay liability of between £650m and £750m, with councilors describing the announcement as a “full curveball”. A statement said the issue of equal pay was “one of the biggest challenges facing this council and we apologize for failing to get this situation under control”.
September 2023 – The chief financial officer of the council issues a section 114 notice which effectively declares it bankrupt. The notice said the council’s negative financial position was “due to the cost of securing equal pay claims”, and went on to cite the figure of £650m-£760m as the reason for issuing the notice.
202 October3 – The Government is sending six commissioners (the most ever appointed to a local authority) to help run the council as part of an intervention program planned to last five years. Their powers include financial management and control over strategic financial decision-making.
February 2024 – The council receives £1.25bn of emergency financial support from the government. This is not a loan, but special permission to sell assets and borrow money to cover costs – including more than £800m to meet the equal payment.
March 2024 – Council adopts budget cuts believed to be the biggest in local government history. They include cutting up to 600 council jobs, scrapping almost all arts funding, selling 11 community centres, dimming street lights and moving rubbish collections to fortnightly. Council tax is due to rise by 21% over two years.
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