Bankrupted After Equal Pay Abuse: Birmingham’s City Labour Council Fails the Working Class
The council has been in talks in recent months over the management of finances in Britain’s second city which has now fallen into financial collapse after a cheap shot over equal pay.
Birmingham’s Labour Council has effectively declared bankruptcy, felled by a £760 million bill for equal pay claims. Barbara Castle must be turning in her grave.
Birmingham City Council, the largest local authority not only in the country but in Europe has in effect declared itself bankrupt after issuing a section 114 notice, signalling that it does not have the resources to balance its budget.
The notice, preventing all but essential spending to protect core services, was issued on Tuesday, it read: “Birmingham City Council has issued an s.114 notice as part of the plans to meet the council’s financial liabilities relating to equal pay claims and an in-year financial gap within its budget which currently stands in the region of £87m.
“In June, the council revealed it had paid out £1.1bn in equal pay claims over the past decade, and had a current liability of £650-750m, accruing at a rate of £5m to £14m a month.
“The council is still in a position where it must fund the equal pay liability that has accrued to date (in the region of £650m to £760m), but it does not have the resources to do so.”
It added: “The council’s senior officers and members are committed to dealing with the financial situation and when more information is available it will be shared.”
The equal pay dispute comes after a Supreme Court ruling back in 2012 found in favour of mostly female employees of Birmingham City Council – and that a bonus scheme that was handed out to staff in certain roles favoured those which were mainly taken up by men, to you, me and the courts that amounted to pay discrimination.
Amazingly the politicians responsible claim they face “unprecedented challenges” as if external forces caused this crisis. In truth, Birmingham Labour inflicted this wound upon themselves through discrimination and negligence. Workers fighting for equal rights did not bankrupt the city – the council’s abuses did.
In a statement, the leader and deputy leader of the Labour-run council, John Cotton and Sharon Thompson, said: “Like local authorities across the country, it is clear that Birmingham city council faces unprecedented financial challenges – from huge increases in adult social care demand and dramatic reductions in business rates income, to the impact of rampant inflation, it is clear that local government is facing a perfect storm.”
The sad truth is that Birmingham’s Labour-run council has betrayed not only its working-class constituents but also the principles it once professed. Equal pay should have been a non-negotiable commitment, not a fiscal quagmire threatening the city’s financial stability. It is a stark reminder that, in the world of politics, actions speak louder than words, and the consequences of ineptitude are borne by the very people who trusted their elected representatives to safeguard their interests.
By issuing a Section 114 notice, Birmingham has ceased all non-essential spending and handed total control of its finances to city officials. This nuclear option is a last resort for insolvent councils. For Britain’s largest local authority, it confirms the utter failure of leadership.
The council last year published a financial plan described as a “bold budget” designed to “maximise the potential of a golden decade for the city”, ahead of the arrival of the Commonwealth Games that took place in Birmingham last summer.
In a council meeting on Tuesday morning, Robert Alden, the leader of the Conservative opposition, accused the council of “lying to the people of Birmingham”.
“This administration claimed that under Labour Birmingham was facing a golden decade. This was fools’ gold. It is cloud cuckoo land to claim the problems in Birmingham are being replicated across the country,” he said.
This debacle reeks of establishment self-interest, not democratic socialism. Birmingham Labour prioritised petty savings over pay equity. Now fantasy budgets and executive mismanagement have combined with their discrimination to push the council over the edge.
But as always, the politicians responsible will face little consequence, insulated as they are by privilege and power. But for Birmingham’s citizens, the damage is done. With Labour littering the nation with broken promises, is it any wonder trust in the political class deteriorates?
No matter how you look at it equal pay is a basic right in the 21st century, not a bargaining chip politicians can deny. Yet Birmingham Labour, supposedly the representatives of a democratic socialist party, chose to discriminate against female employees. Now the bill has come due, and the coffers are empty, the shame is it’s the good people of Birmingham that will have to pay.
Overall this affront to progressive values is hardly surprising from today’s self-serving political class of all colours. However, there was a time when one expected better from an authority bearing Labour’s name. Birmingham’s workers fought tooth and nail to achieve equal pay protections. For a Labour council to then deny those hard-won rights is unconscionable.
With austerity imminent, Birmingham’s most vulnerable residents will bear the brunt of Labour’s failure. The Party once stood firm against such callous neglect of working people. Now they themselves inflict it.