'Bankrupt' Birmingham City Council braced for government intervention

Councillor John Cotton said the council was talking to unions about a new job evaluation scheme

Birmingham City Council is braced for intervention by the government after effectively declaring itself bankrupt.

It is thought commissioners could be sent in to run the authority this week and the BBC has been told a statement is due in the Commons on Tuesday.

A minister from the Department for Levelling Up, Housing and Communities is expected to set out the first steps in the process.

The council is facing the prospect of a £760m bill to settle equal pay claims.

Two weeks ago it warned that bill was increasing by £5m to £14m each month.

Ex-worker and pay claimant Sally Maybury questioned why the local authority had not acted sooner.

The council filed a section 114 notice earlier this month, which means it is effectively bankrupt and has halted all but essential spending.

The authority needs to settle the multimillion-pound bill, having already paid out more than £1bn in compensation to underpaid, mainly female workers who missed out on bonuses given to staff in traditionally male-dominated roles.

Rachel Fagan, from the GMB union, said on Monday the union had just been notified of a tribunal date next year for the latest claims and was now consulting with members across the council about how they felt about equal pay and what they wished to do next.

Sally Maybury questioned why the council had not acted sooner to settle claims

Council leader John Cotton apologised to the people of the city over the weekend and insisted he had "no prior notice" of its "bankruptcy" crisis.

He said he had met Levelling Up secretary Michael Gove last week to discuss support, amid reports Mr Gove is set to announce plans to appoint commissioners to take over the day-to-day running of the Labour-led authority.

Birmingham City Council declined to comment on the reports.

The BBC understands council staff were sent an email on Monday regarding media coverage.

It assured staff the council was in constant discussions with the department and they would be informed about an update when there was one.

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Ms Maybury worked for the authority for 22 years and supported people accessing benefits. She has already received two payouts for claims made in 2012, when she was one of 174 people who took on the council.

She began a third claim in November 2021 when the GMB informed her she was entitled to, as bin workers had received payments other employees had not.

She worked part-time but said she believed full-time workers would be entitled to about £18,000 each.

"It's quite a large sum of money so... I'd like to get whatever I'm entitled to, so along with about 3,000 other GMB workers I put in for an equal pay claim," she said.

She said she felt the council seemed to treat women "as not worth as much money as men".

"I was a single parent with three children claiming tax credits and all the time, you know, you were worried about money."

She said through her job she had encountered quite a few council workers applying for council tax reductions because their salaries were not keeping up with the cost of living.

Seeing the council in such a difficult financial state now made her feel very sorry for the workers, she said, but hoped the situation could be resolved.

Rachel Fagan, from the GMB, said the union had been notified of a date for a tribunal hearing next year

"Why did they not see this coming for a third time?," she added.

Ms Fagan said female council workers "have had enough and they want to fight for equal pay and for pay justice and I think they'll show Birmingham City Council that they want to get this issue fixed".

She said the situation for female members who had missed out on parity around their pay was becoming desperate.

"I've been going around schools the past couple of weeks speaking to members about how this is affecting them directly and these women and their families are going without things because they're not being paid the correct wages," she said.

The council has a new job evaluation scheme for staff and wanted to discuss it with all unions linked to the council by 12 September, but Ms Fagan said the GMB was not being difficult in not coming to the table to meet officials.

"We're constantly in communication with Birmingham - in fact it's the other way round," she said.

"They're failing to talk to the unions and to talk to the GMB about equal pay and pay justice and about how we solve this problem and get it fixed."

Speaking to the BBC's Politics Midlands programme, Mr Cotton said the council had been working with unions to develop the new scheme but said there was "clearly further discussion that needs to be had to ensure we've got the most robust model in place".