Britain’s second-largest city, Birmingham, declared bankruptcy on Tuesday, raising fears of a domino effect on other municipalities amid a cost-of-living crisis and after years of budget cuts under Tory governments. One year from the next legislative elections, this announcement by the City Council of central England, which manages the public services of more than a million people – an unparalleled number in the country, London being divided into boroughs -, came to feed accusations of public service negligence aimed at successive 13-year-old “Tory” executives.
The case comes after months of strikes in a completely overwhelmed hospital system and during a back-to-school period dominated by the crisis in schools built with defective concrete, which led dozens of establishments to partially or even completely close just before the end of the school year. return of the children to class. Formally, Birmingham City Council, unable to balance its budget as required by law without government assistance, placed itself under the protection of ‘Section 114’. This means that only essential expenses are maintained.
Labor mayor John Cotton explained that he had taken this “necessary step” to return to a healthy situation. He called into question several exceptional expenses, such as a conviction for violation of the law on equality between men and women, as well as the installation of a new computer system. But he also denounced the drop in funding granted by successive Conservative governments and the crisis in the cost of living. With social spending exploding and inflation driving up costs, local authorities like Birmingham are facing “unprecedented financial challenges”, assured the elected official.
He cited an estimate by the federation of local authorities Sigoma estimating that 26 of them could go bankrupt in the next two years. “It is clearly up to locally elected councils to manage their budgets,” said a spokesman for Prime Minister Rishi Sunak, saying Birmingham had benefited from a 9% increase in funding this year. The budget of the municipalities in the United Kingdom depends on the income of local taxes applied to citizens and businesses, but also on a contribution from the State.
According to the think tank Institute for Government, this funding from London fell by 40% in real terms between 2009/2010, a period marked by the coming to power of the Conservatives, and 2019/2020, before rising again with exceptional expenditure. related to the Covid-19 pandemic. Over this period, the British have seen their local taxes soar and the trend has continued recently with soaring prices, aggravating the cost of living crisis, without stopping the visible deterioration of public services. “The funding system no longer works at all. The local councils have worked miracles for 13 years but there is no more money”, alarmed the president of the Sigoma federation Stephen Houghton, calling on the government for help.
Before Birmingham, the London borough of Croydon and the town of Thurrock, east of the capital, declared themselves bankrupt a year ago. “Central government has left communities living day to day and year to year for far too long. “Birmingham is the largest council to go bankrupt so far, but unless something changes it won’t be the last,” said Jonathan Carr-West, director of the Local Government Information Unit, an advisory body. the communities.
The municipalities are notably responsible for the management of public schools, whose material difficulties have been highlighted in recent days by a succession of revelations about the fragile concrete used from the 1950s. The conservative government, well behind in the polls by Labor, has been accused of neglecting the issue despite known risks since a school ceiling collapsed in 2018. He also appeared to shift blame to municipalities and schools, downplaying the problem, Rishi Sunak presenting as reassuring news the fact that 95% of establishments were not affected by this concrete.
