LONDON: The City Council of Birmingham in the United Kingdom (UK) declared itself effectively bankrupt on Tuesday, reported sXinhua.
The council announced it was unable to meet its debts, which it has accrued mainly due to equal pay claims by staff and former staff.
Senior officers have called a halt to all new spending, except for on vulnerable people and essential services.
With a population of about 1.15 million people, Birmingham is the second-largest city in the United Kingdom.
Birmingham City Council said it had issued a Section 114 notice in order to meet its financial liabilities relating to Equal Pay claims and an in-year financial gap within its budget, which currently stands in the region of 87 million British pounds (US$109 million).
“In June the Council announced that it had a potential liability relating to Equal Pay claims in the region of 650 million to 760 million pounds, with an ongoing liability accruing at a rate of 5 million to 14 million pounds per month,” the council said in a statement.
“The Council is still in a position where it must fund the equal pay liability that has accrued to date, but it does not have the resources to do so,” it said.
Spending controls already in place will be tightened, the Council said, to ensure there is a complete grip on spending. – BERNAMA-dpa
