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Blame, resignation calls and fear for vital services as Birmingham City Council faces financial chao

Birmingham residents and organisations have reacted with fury, fear and concern to news that the city council has to fund historic equal pay liabilities worth more than £650 million – plunging it into budget chaos. As revealed by BirminghamLive earlier today, the council is in urgent talks with the Government over the state of its finances as a result.

It can’t afford to pay the claims, leaving its budget for the year ahead and possibly for years to come in turmoil. Every service the council runs is now facing a review as part of a budget recovery plan.

Strict spending controls have been brought in as part of the immediate response. The city’s Conservative leadership are demanding resignations as a result.

In a hard-hitting statement, they say they want the council’s political leaders to go. The issue came to light as part of recovery work linked to the council’s troubled implementation of a new IT and finance system, Oracle, which has itself run up an unexpected £100 million bill, said the council.

The equal pay issue that triggered today’s revelations has locked Birmingham City Council into a financial straitjacket for over a decade, with millions of pounds of taxpayer cash every year poured into settling claims. Originally they focussed on women successfully arguing their roles were underpaid and undervalued compared to men in comparable but different jobs.

Costs of more than £1.25billion have been run up so far, though we understand thousands more claims are still active. The reaction to news of the new wave of expected liabilities and the knock-on impact on services has been swift, with demands for urgent action and a rapid solution.

Worried residents say they fear services, already ‘hanging by a thread’, will be further decimated and impact the worst off and most vulnerable. Saidul Haque Saeed, who is a community organiser with Citizens’ UK in Birmingham, supporting vulnerable families, was enjoying celebrating Eid with his family when news broke.

He said: “Couldn’t get to the end of a religious holiday with my family without epic bad news breaking for all Brum families – especially those who are vulnerable and already struggling!” It was a concern shared by Dave Rogers, chief executive of Mencap, who commented: “More anxiety and fear for those citizens who rely on already fragile and porous social care services and support.

“To be fair, to this point the council has done everything to protect the services we have left, but I fear that option is now under great threat.”

Said Ramandeep Kaur: “This is my council. Services are already hanging by a thread so this is terrible news for Birmingham residents.”

Tweeting as SEND Parent Action Group, one said: “Not the first time this has happened either, hence the reserves. Hands off SEND services. Try cutting some of the extortionate salaries in the city and the other rubbish the city council so heavily commission.”

David, commenting on the news, said: “This is unacceptable. How can this possibly be a new problem? Wasn’t this sorted years ago? The council has shown time and time and time again that it is not able to govern competently. We need to break the city up into smaller units. The council executive team should resign.”

Martin Dalton said answers were needed about why the council had not sorted out the issue of equal pay sooner. Zeid Hussain had just one word: “Unbelievable” while for another reader it was four: ‘Oh crappy shappy ..draapy’

David Frost asked: “Hot on the heels of the £100m Oracle debacle. Surely bankruptcy has to be on the horizon?” Simon Dixon referred to an “absolute clown show”.

Several Villa fans expressed their concern that plans for Villa Park would be affected; while the prospect of a new station opening in Witton was described as ‘very unlikely now’. Opac wrote: “I guess we won’t be getting that transport infrastructure development money now.”

One reader reacted with sarcasm: “Does this mean they’re not going to empty the bins properly, or fill potholes, or grit the roads when it snows? How will we know the difference?”

Another added: “This financial challenge eclipses anything faced before. Apologies are offered, but the consequences are clear—fewer resources, reprioritisation of spending, and a future with even further diminished taxpayer support.”

Green Party leader in Birmingham, Coun Julien Pritchard, described the news as ‘utterly staggering’ and ‘gutting and extremely worrying for anyone reliant on vital council services. Brummies are now suffering double whammy of cruelty from Tory austerity cuts and incompetent handling of this crisis by the Council’s Labour Administration.”

Lib Dem councillor Izzy Knowles messaged: “All I can say is it is devastating, as the people who rely on the council most are the ones who will lose the most. I hope it can be sorted out.”

Edgbaston Tories tweeted: “Labour have run the city’s finances into the ground and we now face the very real possibility of the council declaring bankruptcy, whilst residents suffer from cut services that were already failing.”

Labour councillors also expressed their utter disappointment and dismay at the announcement. Coun Jack Deakin tweeted: “This is heartbreaking, something avoidable if the actions of those in the past were different, and the inaction of those who came after them different too. I’m in politics to change lives for the better, that’s why I joined UK Labour.

Kerry Jenkins, Moseley, added: “This is going to be devastating in terms of cuts to some of our services. Councillors need to be told why we were not advised about the seriousness of the situation before now. Questions have been asked repeatedly about these historic claims and there should have been a plan in place.”

We are continuing to discuss the situation with Birmingham City Council. Leader Coun John Cotton, who announced today’s news, told Birmingham Live: “This is one of the biggest challenges this council has ever faced, and we apologise for the failure to get this situation under control. It means there will be significantly fewer resources available in the future compared to previous years and we will need to reprioritise where we spend taxpayers’ money.”

Email if you wish to contribute to the ongoing conversation on this issue. We are particularly keen to speak to staff working for Birmingham City Council and equal pay claimants, in confidence.

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