Britain’s second largest city declared a financial crisis
Birmingham Her city council declared a financial crisis and halted all other payments except funding for essential services. All this was done on the basis that British governments have cut the city’s budget by £1 billion since 2010.
The majority Labor city government considers this step necessary to restore the expenditures of the second largest city in the United Kingdom to a stable position. According to them, the problem has existed for a long time, but now the situation has become very critical.
Birmingham’s budget is also affected by hyperinflation and the associated high welfare costs for the local population. Parallel to all this, recently, the local business tax has not received such a large amount either.
According to the city administration, £87m is missing from Birmingham’s coffers annually: the city’s total annual budget is £3.2bn.
Not to mention that they will have to pay 760 million pounds from the central budget to obtain equal wages for municipal employees working in the same job, fulfilling an earlier promise. However, an appropriate framework for this is not currently available.
In London, a spokesman for British Prime Minister Rishi Sunak said: Birmingham received an additional support of more than 9 percent of the total 5.1 billion pounds allocated to local governments (city councils).
The government recognizes that UK city leaders are currently facing serious difficulties and are therefore under great pressure
– added the spokesperson, who at the same time emphasized that this problem should be fundamentally solved by the leaders of Birmingham.
Birmingham is not alone
Thurrock’s management in Essex, east London, announced in December that it was in financial difficulty, while Woking, southwest of the capital, did the same in June this year.
The British organisation, which includes 47 city councils, warned last week that one in 10 of its members were considering coming public about financial hardship. There is also a separate law in Britain, which can be used by local governments to formally make it clear to the public and the country’s leadership that there are significant holes in their accounts.
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