Birmingham City Council issued with immediate spending freeze
The Council owes up to £760 million
Last updated 5th Jul 2023
Birmingham City Council says a review will be set up to look into how it owes between £650 and £760 million in equal pay compensation.
The bill is the equivalent to its entire annual spending on services.
In a statement released this afternoon, the council says it will now look into how the payment system being used was left to accrue so many claims and who is accountable.
And with fears the council could run out of money, mandatory spending restrictions will be bought in, with non-essential spending ceasing with immediate effect, which will then have a direct impact on services.
Birmingham City Council leader Cllr John Cotton said: "I've been clear from day one that I will take whatever action is needed to address the substantial challenges facing the council and these measures are essential to grip the situation - particularly in terms of financial controls, organisational capacity and improved governance.
"We will be open and transparent throughout this process and the independent reviews and judge-led inquiry will ensure that there is proper accountability for these failings."
Birmingham City Council deputy leader Cllr Sharon Thompson added: "This is one of the biggest challenges this council has ever faced, and we must understand how the issues have arisen to prevent a repeat in the future.
"Given the scale of this challenge, we must impose mandatory spending restrictions. But as we have done throughout the cost-of-living crisis, we will continue to focus on tackling social injustice and inequality across our city.
"We will do everything we can to protect the services our residents rely on."