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‘Bankrupt’ Birmingham City Council approves finance plan

by Paul Morgan

Birmingham City Council has approved a financial recovery plan after declaring itself essentially bankrupt earlier this month. The authority, facing a budget shortfall of £87m ($115m), blamed this on an equal pay bill of £760m and the spiralling costs of a new IT system. During a four-hour meeting on Monday, councillors voted to accept the Section 114 notice, agreeing that the council’s spending commitments exceeded its revenue. The council will now have to implement spending controls until a new budget is passed, and prepare an emergency budget for next month. Union members staged a protest outside the meeting, expressing concerns over potential job cuts.

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