2023-09-06 06:34:17
2023-09-06 14:34 Lianhe News Network corner 24 hours The 2022 Commonwealth Games will be held in Birmingham.Figure / Archyde.com
【2023. 9. 6 UK】
Birmingham declares virtual bankruptcy: Why did Britain’s second largest city fall into the abyss of deficit?
“Birmingham, which has just finished shouting the ‘Golden Decade’, is actually bankrupt…” Birmingham, the second largest city in the UK, went bankrupt on September 5. The city council stated that the current budget gap is 87.4 million pounds, and therefollowing it will stop removing All public sector expenditures other than statutory essential services such as road maintenance, waste collection, and protection of vulnerable groups. Council leader John Cotton blamed the new IT system installed by the council, £760m in gender pay claims, and cuts to Birmingham by regarding £1bn over the years by the Conservative central government. sterling funds. Cities across the UK have been facing rising public healthcare expenditures and reduced commercial tax revenues in recent years, coupled with severe inflation since 2023. Although Birmingham is not the first British city to announce financial distress in recent years, it will be in 2022 It was only announced that it has entered the “Golden Decade”, and the current situation can be said to be the loudest alarm.
The Birmingham City Council issued the “Section 114 notice” (Section 114 notice) on September 5 – this notice represents the local authority’s judgment that it is in financial difficulty, can no longer balance the budget, and cannot carry out public expenditure. The legal source of the Article 114 notification comes from the 1988 Local Government Finance Act, which is issued by the chief financial officer of the local council and does not require the consent of the members; and the British local government cannot directly declare “bankruptcy” and issue Article 114 One notice indicates that the local government has been “substantially bankrupt”, and a meeting must be held within 21 days to discuss the follow-up disposal.
According to the decree, Birmingham City Council will now have no other public sector expenditures except for statutory basic services, such as road maintenance, garbage collection, social care for vulnerable groups, child protection, education, and public libraries.
Birmingham Council blamed the £760m gender unequal pay claim for virtual insolvency on 174 teaching, cleaning or catering staff in 2012, most of whom were Women) have sued Birmingham Council for failing to receive the same bonuses as men in the same position. The case has since become precedent, and Birmingham Council has paid almost £1.1bn in claims for such equal pay cases. But as of June 2023, the Birmingham authorities pointed out that the liabilities caused by such equal pay cases have grown at a monthly rate of 5 million to 14 million pounds, and the accumulation has reached as high as 650 million to 760 million pounds so far. Birmingham’s municipal budget.
Birmingham City Council.Figure/Wikimedia Commons
In addition, the Birmingham City Council installed the Oracle IT system, originally expecting to simplify the use of the council’s financial and human resources systems. The initial budget was 19 million pounds, but the installation project was delayed for 3 years. “BBC” reported in May 2023 It was also reported that the final installation cost of the system might be as high as 100 million pounds. Birmingham is governed by the Labor Party with a parliamentary majority. In a statement, the parliament also accused the Conservative central government of cutting Birmingham’s funding by regarding 1 billion pounds since it came to power in 2010.
The accumulation of various influencing factors makes Birmingham face a deficit of 87.4 million pounds in the 2023-24 fiscal year. According to the data released by the city council, the budget gap will increase to 164.8 million in the next 2024-25 fiscal year. GBP.
Labor parliamentary leader John Cotton and deputy leader Sharon Thompson said:
“Like all parts of the country, it is clear that Birmingham City Council is facing unprecedented financial challenges … Rising demand for health care, a significant reduction in business tax revenue, combined with the impact of severe inflation, it is clear that Birmingham is facing a ‘perfect storm』。」
British Prime Minister Rishi Sunak’s office responded that Birmingham Council’s announcement of financial distress will deeply worry residents, while the central government has stepped in to provide support and provide additional funds to Birmingham Council between 2023 and 2024. 5.1 billion pounds, an increase of more than 9% from the original budget; but the Prime Minister’s spokesman also pointed out that “local councils should manage their own budgets”, the central government is concerned regarding its governance arrangements, and asked the leaders of Birmingham Council to guarantee tax payment People’s money is put to the best use.
Birmingham skyline.Figure/Wikimedia Commons
As for the equal pay case, Downing Street said it had commissioned an independent governance review and would report its findings in the coming weeks.
In recent years, Birmingham has carried out a huge reconstruction project. It is expected that through public funds and private investment, the abandoned old industrial land and the city center will be reintegrated to promote the development of the technology industry. One of the best-performing urban economies, the city council is touting a “golden decade” for Birmingham when the 2022 Commonwealth Games are held in Birmingham.
Now, Birmingham Council’s opposition leader, Conservative Robert Alden, says the “golden decade” has been dashed by financial woes, with the city’s governing Labor party overspending and failing to quickly resolve the equal pay case, Chaos was created, at the cost of Birmingham residents losing valuable public services and public investment.
Birmingham has a population of regarding 1.1 million, and it is the second largest city in the UK in terms of population alone. London is undoubtedly the largest city in terms of city size, population, economic development, and importance, but Which city is the second largest city depends on personal opinion; although the British media usually call Birmingham the second largest city, many British people—especially many football fans—will regard Manchester in the north of England as the second largest city. It is the second largest city in the UK. If it goes beyond the scope of England, some people think that Edinburgh is the second largest city in the UK.
People of Birmingham who are dining. Photo / European News Agency According to the regulations, the Birmingham City Council now provides statutory basic services, such as road maintenance, garbage collection, protection of vulnerable groups…
In addition to Birmingham, there are also many local councils across the UK that are in financial difficulties, such as Woking borough council in Surrey (Woking borough council) issued section 114 notice in June 2023, Thurrow in Essex Thurrock was issued in December 2022, following Croydon, Slough and Northamptonshire also issued section 114 notices and fell into virtual bankruptcy.
According to the Local Government Association (Local Government Association), in the 2023-24 fiscal year, the total deficit of local governments in England and Wales is expected to reach more than 2 billion pounds, and the budget consumed by the basic services that local councils are required to provide by law continues to rise , while trying to achieve a balance of payments.
Jonathan Carr-West, chief executive of the Local Government Information Unit, a British think tank, said Birmingham’s financial woes were a “sobering moment” and that decisions by local councils should be strictly regulated. In addition to the review, the general public should also examine the lack of uniformity and short-term financing systems in various regions.
The financial health and transparency of local governments have also been criticized. The British House of Commons only required local councils to publish more than 500 long-overdue accounts that should have been published before September 1, 2024. In April, he called on the government to urgently strengthen the financial supervision of public institutions in England, and pointed out that only 12% of local financial audits in 2022 were completed on time, and more than 500 audits have been delayed since the 2015-16 financial year.
A woman on the streets of Birmingham.Photo / European News Agency in the past 24 hours UK
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