7th September 2023
Birmingham has more canals then Venice and more hills than Rome – you will be told – and it has the largest local authority in Europe and it is the only city in the United Kingdom, other than London, with a population of over a million.
And the city council now also has a section 114 notice – you can click here to read it.
The notice is under section 114(3) of the Local Government Finance Act 1988 (coincidentally the legislation that introduced the poll tax).
The provision is simple:
“The chief finance officer of a relevant authority shall make a report under this section if it appears to him that the expenditure of the authority incurred (including expenditure it proposes to incur) in a financial year is likely to exceed the resources (including sums borrowed) available to it to meet that expenditure.”
The report is worth reading in full as a snapshot of a council in trouble and as an account of how it got into that trouble.
I am a writing a longer piece about this, but I thought this would be a useful post.
For me this has brought to my attention an area of real interest… thank you for highlighting it.
Thanks for this. I look forward to reading the longer post in due course. I spent over 35 years as a civil engineer in local government. My first qualification was as a municipal engineer for which I was required to study financial, legal and administrative matters. The financial arrangements for local government were never well understood amongst piers and certainly not by laymen/ women. Year by year local government has additional duties piled on it and usually funding, in real terms, reduced. Tory government has systematically trashed almost everything in the country and it seems a deliberate policy. My heart goes out to all the LGOs and residents of Birmingham.
Interesting. If there is a legal/policy dimension to how so many councils have apparently sleepwalked into letting female pay fall so far behind, I’d be interested to read about that side of it too.
My local council might not be the same size as Birmingham but it has its own problems https://www.localgov.co.uk/BCP-Council-in-bankruptcy-warning/57737
How many local councils across the entire country are in the same situation?
Somewhat telling that these reports are more often than not issued by an “interim” Director, which is usually (although not always) a sign of an unhappy ship.
That said, a lot of Auditors should now be looking carefully at other Authority’s provision for equal pay claims, one suspects a few other perhaps happier looking ships are heading for a rock or two.
One of the things you learn about local government is that practically everything is a section something or other. The Section 114 notice issued by BCC refers to a Section 151 officer and a Section 25 statement, and anyone who has even a passing acquaintance with the planning system will be familiar with a Section 106 and a Section 298 agreement. The use of bare section numbers, without further reference to the Act which contains the section in question, can be one of the more impenetrable aspects of local government jargon.
This is true. Fortunately so many people google the section numbers that the local government hits are quite high up.
Thank you for sharing this report.
I wonder how many employers have worked out their potential equal pay liability and whether they would, if asked to pay, be bankrupted by it. My guess is that most have never thought about it. Liabilities would be far higher in the private sector, as pay differentials are greater.