While many local authorities have faced budget pressures, Andy Street said Birmingham City Council’s position was unique
By Elizabeth Glinka & Sophie Madden
BBC West Midlands
The West Midlands mayor has questioned whether council officers in Birmingham hid the scale of equal pay bills, or whether its leadership failed to act.
Birmingham City Council declared itself essentially bankrupt earlier this month in part over a £760m equal pay bill.
The authority’s leader, Councillor John Cotton, has insisted he had “no prior notice” of the section 114 notice.
But Andy Street said either officers “didn’t report” what was happening, or the leadership knew and “didn’t act”.
Speaking to BBC Politics Midlands, Conservative Mr Street said there had “to be reform so this doesn’t happen again”.
The government announced on Tuesday it would send in officials to help with the running of the local authority due to its financial crisis.
Council leaders have welcomed the move.
“The commissioners have to act really, really quickly to raise the case so we can begin the recovery of the finances of the city,” Mr Street said.
“Every single council in the country has faced huge difficulties with balancing its budgets.
“But… what has happened in Birmingham is unique.”
Paulette Hamilton MP said equal pay “wasn’t on the table” when she was a councillor
The Labour-run authority is facing the prospect of a bill of up to £760m to settle equal pay claims which is increasing by £5m to £14m each month.
The introduction of a new IT system, which has come under fire, has also seen expected costs spiral from £19m to £100m.
Labour’s Birmingham Erdington MP Paulette Hamilton, who was a city councillor until 2022 and had sat on its cabinet, said: “When I left the council there was no talk of this massive [equal pay] liability.
“It wasn’t even on the table.”
She said “Tory austerity cuts” had played a bigger role in the finances when she ran the adult social care and health department.
Ms Hamilton said only when an inquiry was held, would people know “what has happened” at Birmingham City Council.
Birmingham City Council faced its first bills over equal pay claims over a decade ago, in 2012, when 174 women who worked in traditionally female roles won a Supreme Court ruling against the local authority.
The former staff had worked in such jobs as cooks, cleaners and care staff for the council and had discovered they had been denied bonuses given to staff in traditionally male-dominated roles such as refuse collectors and street cleaners.
What is a Section 114 notice?
- Under the Local Government Finance Act 1988, if a council’s chief financial officer believes the authority cannot meet its expenditure commitments from its income, they have to issue such a notice
- They do not need the consent of councillors to do so
- Local authorities in the UK cannot go bankrupt but the issuing of the notice is often described as “being effectively bankrupt”, meaning they cannot make new spending commitments and must meet within 21 days to discuss next steps
- No new expenditure is permitted with the exception of funding statutory services, including safeguarding vulnerable people, but existing commitments and contracts will continue to be honoured
- Most councils in such a position pass an amended budget, reducing spending on services
- Thurrock, Croydon, Slough and Northamptonshire are among those to have issued section 114 notices in recent years
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