Birmingham Faces Economic Turmoil: Navigating the Financial Storm
Birmingham Faces Economic Tu...
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Birmingham Faces Economic Turmoil: Navigating the Financial Storm

17 September 2023
2015
2 min.
3
Birmingham Faces Economic Turmoil: Navigating the Financial Storm

Financial Storm Hits Birmingham

Birmingham City Council faces an imminent financial crisis that could lead to a forced sale of valuable assets.

Some of the city's most cherished landmarks, including the Central Library, Birmingham Museum and Art Gallery, Sarehole Mill museum, and the council's stake in Birmingham Airport, may be on the chopping block. This comes as a result of the council, which happens to be Europe's largest local authority, being placed under special measures this week.

Tomorrow, Housing Secretary Michael Gove is expected to announce the appointment of government-appointed commissioners who will assume control over day-to-day operations and explore the possibility of asset sales.

Notably, the council, which currently holds 54,000 council houses, has resorted to asset sales in the past, such as the National Exhibition Centre, which fetched £307 million in 2015. Their financial troubles escalated this month when they declared an inability to balance their books, prompting the issuance of a section 114 notice, preventing them from making new spending commitments due to what they describe as "unprecedented financial challenges."

Adding to their woes, the council was required to pay a staggering £1.1 billion as part of an equal pay ruling, compensating female employees for bonuses they missed out on compared to their male counterparts. Last month, the council revealed a budget shortfall of £87.4 million for the fiscal year 2023-24. In response, council leaders will unveil a financial recovery plan during an extraordinary meeting scheduled for September 25.

A government source, speaking to The Sunday Times, grimly noted, "The extent of mismanagement exceeds our initial expectations."

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