Why Birmingham, Europe’s largest municipal authority, is bankrupt

Every hour, standing in the heart of New Street, Birmingham’s main station, Ozzy waves his enormous mouth, to the delight of passers-by. This 10 meter high articulated metal bull was the mascot of the Commonwealth Games, organized in 2022 in the capital of the West Midlands (1.1 million inhabitants), in the United Kingdom.

The sporting event, bringing together athletes from the fifty-six Commonwealth nations (mostly former colonies of the British Empire), was considered a popular success in an otherwise rather gloomy metropolis. At the time, Labor Ian Ward, leader of the city council, praised the start of a “golden decade” for this former industrial city now focused on commerce and financial services.

“We had a good party, but now we have a hangover”, sighs Ewan Mackey, deputy leader of the conservative opposition in the municipal council, led by a Labor majority. On September 5, the executive of the largest municipal administration in Europe created a shock by declaring itself bankrupt, unable to honor its future bills. The expected deficit stands at £87.4 million (€101 million) for the 2023-2024 financial year. An extraordinary meeting of the municipal council is planned for Monday September 25, during which the new head of the local executive, Labor John Cotton (who arrived in the spring), must outline a rescue plan.

Also read the report: Article reserved for our subscribers In Birmingham, “people don’t yet dare to return to the city center”

“The board devoted too much energy to the Games instead of focusing on financial issues. He spent £500 million on an athletes’ village which went unused and was converted into apartments that were too expensive for most residents.specifies Ewan Mackey, who receives in his office at Council House, the Birmingham town hall, an imposing 19th century buildinge century, witness to the presence of the city during the Victorian era. However, explains the elected official, the financial crisis is mainly due to “a sum of incompetence”particularly in “fiasco” of Oracle management software, which was to cost 19 million pounds, but whose deployment to all municipal services should amount to 100 million.

Above all, there is a long conflict between the town hall and the unions on equal pay, the resolution of which risks being very costly. Around 3,000 female municipal employees – school assistants or kitchen helpers – filed a complaint of discrimination, demanding to be paid like men for equivalent responsibilities. They are likely to win in court, and the city council has had to agree that compensation could reach £760 million.

You have 74.9% of this article left to read. The rest is reserved for subscribers.

source site-29