Birmingham Municipal Committee/Municipal Council, which is also the second largest city in the UK and the largest local government in Europe, issued the "114 clause notice" on the official website. This situation is usually described as the substantially announced bankruptcy of the local government.
According to the British "Local Government Act", when the local government financial director of England and Wales foresee that the government may not be able to maintain a budget balance, it is responsible for issuing such a notice.Although the local governments in the UK cannot declare bankruptcy and reorganize debts through legal procedures like the United States, the issuance of the "114 clause notice" marks that the local authorities judge that they are in a financial predicament and cannot balance the budget, and will trigger a series of emergency financial measures.
In the official website statement of the Birmingham Municipal Committee, it is clear that this matter is related to the local "equal salary claim".In June of this year, the local government said that the potential claim responsibility was about 650 million to 760 million pounds, and this part of the compensation liability is accumulating at a rate of 5 million to 14 million pounds per month.
The earliest thing to dates back to 2012, and the British High Court ruled to support the equal salary claim lawsuit of the employees of the Birmingham Municipal Commission (mainly women).Since the High Court ruling, the Birmingham Municipal Committee has paid 1.1 billion pounds of compensation so far, but as mentioned earlier, the potential billing amount is still growing at the level of 10 million pounds per month.
In July of this year, the Birmingham Municipal Committee announced that it had suspended all non -necessary expenditures to deal with equal salary claims, but eventually issued the "notice of Article 114".
In addition to the pressure of claims, John Cotton and Sharon Thompson of the Birmingham Municipal Committee also stated in a statement that the local purchase of Oracle's IT system also had a serious impact on finance.This system was originally aimed at simplifying payment and human resources systems. It is expected to cost 19 million pounds, but after three years of delay, the data disclosed in May this year show that its cost may be as high as £ 100 million.
After the Birmingham Municipal Committee announced the suspension of non -necessary expenditure in July, British Prime Minister Rich Sunak once said: "(Central) government's responsibility is not a local municipal committee for rescue financial management."
According to the British "Local Government Finance Act", after issuing the "114 clause notice", it means that local governments cannot make new expenditure commitments, and they must meet in 21 days to discuss the next step.However, in this case, the existing commitments and contracts will continue to be fulfilled, and legal services, including the protection of vulnerable groups, will continue.
Generally speaking, most local governments in this situation will eventually reduce expenditures for public services through a revised budget.
