Daily Management Review

England's second most populous city declares bankruptcy


Birmingham City Council declared that it filed for bankruptcy on Tuesday, September 5. After that day, all payments and expenditures by the city stopped, with the exception of social security responsibilities.

Elliott Brown
Elliott Brown
With nearly a million residents, Birmingham is the second most populous city in England, and its city council is the biggest local government in all of Europe.

The city's legal expenses spent during a lawsuit brought by trade unions, who accused the authorities of continuing to underpay women in the city's predominately female professions, such as caregivers and teaching assistants, were the primary cause of the bankruptcy.

The city has been providing compensation for ten years. However, the costs are increasing by £5–14 million each month, and the municipal officials have already calculated that there will be a total of £650–760 million in unpaid compensation over the years. According to the officials, the city simply does not have that sum of money, and the budget deficit for this fiscal year is already predicted to be £8 million.

source: cnn.com