Great Britain: Why Birmingham went bankrupt

DThe Conservative British government wants to put Birmingham under a commission to put the practically bankrupt city on the path to integration. The local council, led by the opposition Labor Party, is not fulfilling its duties adequately, the responsible cabinet member Michael Gove justified the move in parliament in London on Tuesday. He also announced that there would be an inquiry into how the financial crisis came about.

Birmingham is the second largest city in the United Kingdom after London. According to the BBC, there is an 87 million pound (equivalent to 100 million euro) gap in the municipal budget. The city declared bankruptcy in early September. All but essential expenses have been suspended with immediate effect. A statement at the time said the city was facing unprecedented financial challenges. These include substantial additional costs of care for the elderly, declines in business tax revenues and higher inflation rates.

On top of that, city officials are facing claims in the hundreds of millions from mostly female employees who say they were paid less than their male colleagues over the years.

Next Monday, the local council is scheduled to hold an extraordinary meeting to discuss the recovery plan. There is already speculation in the media that the city may be forced to sell buildings and land.