Nottingham City Council is the latest in a series of councils to declare some form of bankruptcy. The city’s Robinhood-related problems are perhaps the mildest of those reported since 2020, with a deficit of just under €30 million, 10% of its budget.
Municipal managers attribute their financial problems to increased demand for assistance services for adults, children and the homeless. To this end, we should add that the increase in prices was not included in the British government subsidy. Its limited reserves are the result of a business venture and the illegal use of reserve funds in recent years.
If the establishment of a municipal energy supply company in Nottingham led to losses of $40 million, then in Thurrock, a rugged area on the north bank of the Thames, the Eurosceptic city council has incurred debts amounting to about 500 loans from other departments. To finance dozens of solar farms.
In Woking, home to many commuters, who come and go to London for work — or come and go until the pandemic encouraged working at home — the city council has invested in massive glass towers, more common in New York than in Surrey. It is in debt of about 2000 million. Just above Northampton and similar to Croydon in its property investments.
“Crack” in Birmingham
Part of the problem is due to cuts in the Conservative government led by David Cameron and George Osborne in 2010. The department responsible for municipal authorities has significantly weakened its finances. Aggressive councils used their money or loans for investments that would, in their judgment, give them the income needed to maintain their services.
The case with the greatest impact is that of Birmingham, the only English capital, apart from London, with a population of more than one million. The city that was the industrial heart of England now lives on services. Its debt is about 800 million. The main reason is poor personnel management by a workers-majority municipal government.
The Council maintained salary differences between men and women, exaggerating the importance of some jobs held by men, or establishing a system to allow for departure when an employee completed his or her task, which was more common in men’s jobs. The courts ruled in favor of lawsuits brought by employees who demanded equal pay.
When a city council is unable to draw up a balanced budget of income and expenditure, it must declare that it is subject to the rules of Section 114 of the 1988 Act. The administration must reduce its expenditures to limited matters, such as services for children or vulnerable people, the salaries and pensions of its employees, and already contracted expenditures, …It is supervised by one of the state agencies.
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