"Birmingham city council was likely never bankrupt and the decision to issue the section 114 notice two years ago was based on unaudited and materially incorrect information, accounting experts have claimed. The Labour-run council issued a section 114 notice in September 2023, in effect declaring itself bankrupt, which triggered a wave of spending cuts and plans to sell 750m worth of assets. This prompted the government to appoint commissioners to run the council for five years."
"At the time, council leaders blamed a 760m bill for equal pay claims, problems installing a new IT system and 1bn in Tory government cuts over the previous decade. However, having done a fresh analysis of the council's 2022-25 financial accounts, James Brackley, a lecturer in accounting at the University of Glasgow, claims the council underestimated its reserves position by more than 1bn."
"The council's 2022-24 accounts, which were published in July this year after delays, show the council had 784.7m in general fund reserves from which most services are funded as of March 2024. Brackley told the Guardian: We urgently need answers as to why the largest ever cuts and asset sales programme any authority has ever faced was able to be pushed through before a proper assessment of the council's financial situation had taken place."
The council issued a section 114 notice in September 2023, triggering major spending cuts, plans to sell £750m of assets and the appointment of government commissioners. Initial explanations cited a £760m equal pay bill, problems with a new IT system and around £1bn of government cuts over a decade. A fresh analysis of the 2022-25 financial accounts by James Brackley indicates reserves were underestimated by more than £1bn. The published 2022-24 accounts show £784.7m in general fund reserves as of March 2024, despite an earlier forecast of -£677.9m for 2023-24.
Read at www.theguardian.com
Unable to calculate read time
Collection
[
|
...
]