How Birmingham city council ended up in financial crisis: a timeline

How Birmingham city council ended up in financial crisis: a timeline

Questions are starting to emerge about how exactly Birmingham city council ended up in a financial crisis, and whether the figures behind its problems actually stack up.

Here is a rundown of how events unfolded.

April 2022 – The council’s new IT system, its first major upgrade since 1999, goes live. Councillors say IT staff warned that the system had not been fully tested and there were faults. Issues quickly materialise, but council officers say they are being dealt with.

April 2023 – The council’s then chief executive, Deborah Cadman, emails all councillors to say the IT transition is not running as smoothly as expected and has affected operations in finance and HR. A taskforce is established to deal with the issue.

June 2023 – The council states it is facing an equal pay liability of between £650m and £750m, with councillors describing the announcement as a “total curveball”. A statement says the equal pay issue is “one of the biggest challenges this council has ever faced, and we apologise for the failure to get this situation under control”.

September 2023 – The council’s chief finance officer issues a section 114 notice, effectively declaring bankruptcy. The notice states the council’s negative financial position is “because of the cost of providing for equal pay claims”, and goes on to cite the £650m-£760m figure as the reason for issuing the notice.

October 2023 – The government sends in six commissioners (the most ever assigned to a local authority) to help run the council as part of an intervention programme scheduled to last five years. Their powers include financial governance and scrutiny of strategic financial decision-making.

February 2024 – The council gets permission for £1.25bn in exceptional financial support from the government. This is not a loan but special permission to sell assets and borrow money to cover its costs – including more than £800m to cover equal pay.

March 2024 – The council passes budget cuts, thought to be the largest in local authority history. These include cutting up to 600 council jobs, scrapping almost all arts funding, selling 11 community centres, dimming streetlights and moving bin collection to fortnightly. Council tax is due to rise by 21% over two years.