Birmingham, the UK’s second largest city, declared bankruptcy on Tuesday, halting all non-essential spending in the city after receiving equal pay claims for male and female servants totaling £760m (about $956m).
The city council, led by the Labor Party, which provides services to more than a million people, issued a statement on Tuesday, confirming that it was suspending all expenditures in the municipality, except for those for essential services required by law.
The municipal deficit arose because of the difficulties the council had in meeting claims for equal pay made by maids. Expenses to secure this parity range from 650 million pounds (about 816 million US dollars) to 760 million pounds (about 954 million US dollars), according to a report released by the authorities along with the statement.
These claims date back to 2012, when a group of 170 civil servants won the right in court to pursue their equal pay claims against the city council. They alleged at the time that the council did not pay women the same wages and benefits as men for performing the same services.
According to CNN, Sharon Thompson, vice-chairman of the Labor local council, told council members on Tuesday that the city faces “long-standing issues, including concerns about the historic responsibility for equal pay within the council”.
Because of these difficulties and the payments they will have to make, the city council is now projecting a shortfall of £87m (about $109m) for the 2023-24 financial year.
Thompson partly blamed the Conservative Party, which governs the United Kingdom, for the city’s difficulty in raising money to support equal pay. It said Birmingham had “drew £1 billion in funding by successive Conservative governments”.
In response, British Prime Minister Rishi Sunak’s Conservative spokesman told reporters on Tuesday that “it is clear that it is the responsibility of elected local councils to manage their own budgets”.
The spokesman added that the government maintains “regular contacts with them”. [conselheiros de Birmingham] In this regard, it expressed concern about its management arrangements and sought assurances from the Chairman of the Board of Directors on the optimal use of taxpayers’ funds.
Birmingham council leader John Cotton of the Labor Party told the BBC he had announced a new recruitment model in the council to tackle the problem of demands for equal pay.
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