Birmingham issues section 114 notice

Birmingham City Council has issued a section 114 notice as part of plans to meet the Council’s financial liabilities relating to Equal Pay claims and an in-year financial gap within its budget, which currently stands at £87m.

In June the Council announced that it had a potential liability relating to Equal Pay claims in the region of £650m to £760m, with an ongoing liability accruing at a rate of £5m to £14m per month. In July the authority ceased non-essential spending.

The Council is still in a position where it must fund the equal pay liability that has accrued to date (in the region of £650m to £760m), but it does not have the resources to do so.

On that basis the Council’s Interim Director of Finance, Fiona Greenway, (s.151 – Chief Finance Officer) has issued a report under section 114(3) of the Local Government Act, which confirms that the Council has insufficient resources to meet the equal pay expenditure and currently does not have any other means of meeting this liability.

Birmingham City Council said it will tighten the spend controls already in place and put them in the hands of the Section 151 Officer to ensure there is complete grip. The notice means all new spending, apart from protecting vulnerable people and statutory services, must stop immediately.