Andy Street: Birmingham has been ‘let down’ by council

Birmingham City Council’s financial position poses “serious questions about the council’s leadership” and called for an investigation, according to the mayor of the West Midlands Combined Authority.

The council issued a section 114 notice on Tuesday morning, effectively declaring itself bankrupt amid a £760m bill to settle equal pay claims.

This in addition to the costs of the Oracle IT system, which council papers revealed in June could cost the council in the region of £100m to successfully implement.

Birmingham has already paid out in the region of £1.1bn over equal pay claims over the last 11 years.

Andy Street, mayor of the West Midlands Combined Authority described the issuing of the notice as “an admission of defeat”.

“When the news of the equal pay bill broke we were all assured by the council that despite the seriousness of the situation they would produce a plan to settle the bill, however, more than two months on, no plan has emerged,” he said in a statement he released on Twitter on Tuesday afternoon.

“Instead, we are simply presented with what is effectively a bankruptcy notice, the city of Birmingham deserves so much better, I’m incredibly concerned that citizens and the services they rely on have been let down in this way.”

Mr Street added that despite local authorities experiencing significant cuts over the past decade and the challenge to keep services running “the majority of councils” still managed to achieve it, with bankruptcy being “extremely rare”.

He suggested there should be an investigation into what had happened.

“It is not for me to conduct the inquisition,” he said, “- however severely there needs to be one.”

He also vowed to work with ministers, government officials and Birmingham to try and resolve the situation in a way that protects residents and services.

He added: “Just because the city council is in this position does not suddenly mean that Birmingham is failing, indeed far from it. We have made huge strides as a city and region in recent years.

“I would urge anyone looking back to Birmingham to reflect on our progress, and consider our world-class institutions, our innovative businesses and the record amount of investments being made.

“Birmingham remains firmly open for business; I will play my part to ensure the city gets through this.”

Meanwhile, Roger Harmer, Lib Dem leader at Birmingham said that “serious failures with adult social care, equal pay and the Oracle fiasco” had pushed the council “over the edge”.

He said: “Not one of them has apologised to the people of Birmingham for this failure, not one. Lib Dems have already asked for external help with this but now it appears almost certain that Tory commissioners will be appointed to take over the council’s work.

“Every one of Birmingham’s citizens will feel the pain of this decision as we move into unchartered waters.  Services will be cut to essential only meaning that many services that people rely on, services that are essential to those people, are going to be cut.

“Rest assured that the Liberal Democrat group will fight tooth and nail to ensure that the residents are prioritised as this is worked out. No more Birmingham Labour vanity projects, no more passing the buck. They will be answerable to the people of Birmingham.”