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Birmingham City Council has effectively declared bankruptcy after being hit with a £760m bill to settle equal pay claims.

The council said it had issued a section 114 notice, confirming that all new spending, with the exception of protecting vulnerable people and statutory services, must stop immediately.

In a statement declaring itself in financial distress, the local authority said it will “tighten the spend controls already in place and put them in the hands of the section 151 officer to ensure there is complete grip”.

The Labour-run council is the largest local authority in Europe, comprising 101 councillors (65 Labour, 22 Conservative, 12 Liberal Democrat and two Green).

The statement read: “Birmingham City Council has issued a s.114 notice as part of the plans to meet the council’s financial liabilities relating to equal pay claims and an in-year financial gap within its budget which currently stands in the region of £87m.

“In June, the council announced it had a potential liability relating to equal pay claims in the region of £650m to £760m, with an ongoing liability accruing at a rate of £5m to £14m per month.

“The council is still in a position where it must fund the equal pay liability that has accrued to date (in the region of £650m to £760m), but it does not have the resources to do so.”

It added: “The council’s senior officers and members are committed to dealing with the financial situation and when more information is available it will be shared.”

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Why councils are forced to spend less

Equal pay crisis

Sky’s Midlands correspondent Becky Johnson said the council has been in talks in recent months over the management of finances in Britain’s second city and the equal pay crisis.

It comes after a Supreme Court ruling back in 2012 found in favour of mostly female employees of Birmingham City Council – and that a bonus scheme that was handed out to staff in certain roles favoured those which were mainly taken up by men.

Johnson said: “They have been paying out these claims over the years, but the bill is now increasing by about £14m a month and currently stands at £760m – and is just not money the council can afford to spend.

“We know over the summer they stopped essential spending to try to meet this bill – they tried to do this without taking this measure.”

She said the implications of the section 114 notice are “serious”, adding there will be a huge reduction in investment from the council in the city while it tries to figure out how it is going to pay the bill.

Political fallout

“Now this has provoked a huge political row,” Johnson added. “The leader of the Conservative group is accusing the Labour-led council of failing to get a grip of the equal pay issue, and accused them of lying to the public that things were looking rosier than they were financially over recent years.”

Councillor Robert Alden, leader of the Conservative opposition, said: “Labour’s failure in Birmingham has become clear for all to see. What Labour pledged as a golden decade ahead to voters in 2022 turns out to be based on budgets in 20/21 and 21/22 that did not balance and were unfunded.

“Combined with Birmingham Labour’s refusal to deal with equal pay over the last decade this has created this mess where residents will now lose valuable services and investment.”

He added: “Birmingham Labour have no grip of their mess and no ability to fix it, hence why the final say on spending control has now been removed from the Labour political leadership.”

Downing Street said the move by the council will be “concerning” for residents.

Prime Minister Rishi Sunak’s official spokesman said: “Clearly local government is vital to our communities and we know they have been facing pressures. The government for its part has stepped in to provide support, an additional £5.1bn to councils in 23/24, which is more than a 9% increase for Birmingham City Council.

“Clearly it’s for locally elected councils to manage their own budgets, I know the department has been engaging regularly with them to that end and has expressed concern about their governance arrangements and has requested assurances from the leader of the council about the best use of taxpayers’ money.”

He acknowledged Birmingham has a “particular issue around equal pay settlements” and said ministers have “commissioned an independent governance review which will report in the coming weeks”.

“It will be concerning for the people of Birmingham and it is important that the council provide reassurance and deliver on what has been requested by the department,” he added.

Other councils which have effectively declared bankruptcy

Hackney Council issued a section 114 notice in 2000, with Northamptonshire County Council following suit in 2018.

Croydon council issued its third section 114 notice in two years in November 2022, while Thurrock in Essex took the step in December last year after it got into difficulties over borrowing large sums to invest in solar energy.

Woking also issued a section 114 in June this year due to what it said was “an extremely serious financial shortfall owing to its historic investment strategy that has resulted in unaffordable borrowing, inadequate steps to repay that borrowing and high values of irrecoverable loans”.

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A year after I was surrounded in Birmingham, have community rifts healed?

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A year after I was surrounded in Birmingham, have community rifts healed?

As riots broke out across the country last summer following the Southport attack, fear spread in a majority Muslim part of Birmingham that far-right protesters were on their way.

Locals came out on to the streets, and as I was reporting live on air, I was surrounded by a small group of masked men, swearing and gesturing to the camera.

Afterwards, as we were trying to drive away from the area, a man with a knife followed us and attempted to slash a tyre on our broadcast van.

Protesters showed up after word had spread among the muslim community in Birmingham that the far right were planning a protest in the city.
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The moment Becky Johnson was confronted on camera last summer

A year on, I have returned to the area to discuss what happened with some of those who saw their city descend into chaos.

“The local community had lost faith in the local elected members as well as the local policing units,” says Naeem Yousef, 48, who lives nearby. 

“They thought…the only way to protect themselves and the community was by coming out in force.”

Becky Johnson Birmingham anniversary

‘You can’t control their behaviour’

Tanveer Choudhry, 56, agrees. “In every community we have our sort of, shall we call them… idiots, and you can’t control their behaviour,” he says. 

“I think there was a concern that the far-right group that was coming may well be armed… so I think it was just trying to counteract what they thought was coming.”

We are sitting in a cafe, not far from where the unrest broke out last summer.

still from Johnson VT
Image:
Masked men surrounded the Sky team during the unrest

‘They were looking for who they thought were the enemy’

The group I’m with were invited by community activist Naveed Sadiq, who was there that day.

As well as Naveed, there are three other local Muslim men, and two white residents, including Gerry Moynihan.

He recalls deciding to stay at home that day.

“They were looking for what they thought were the enemy – white people – and trying to find white people,” he says.

“Which is why I stayed in my house, because the intelligence I had was, don’t get involved, don’t walk around, and you know, it will pass.”

I ask the group if my team and I were targeted because we were white.

Becky Johnson Birmingham anniversary
Image:
Gerry Moynihan says he decided not to leave his home

“It’s not because you’re white, it’s because they’re actually bored,” Naveed says. “They were wanting a bit of excitement.”

I ask if they think it would have happened if we were all British Asian.

“Of course,” Tanveer replies. “It wasn’t the fact that you were white… it was just the heat of the moment”.

Naeem believes it happened simply because the men involved “do not want anyone filming what they’re doing”.  

“You could have been Asian… they would still try to get you out of the area,” he insists.

Becky Johnson Birmingham anniversary
Image:
Tanveer believes our team would still have been targeted if we were a different ethnicity

‘Are we going to be accepted?’

I’m keen to understand how these men feel now and whether the sentiment that brought people out on to the streets to “protect” them has been reignited by the recent protests outside hotels housing asylum seekers.

The answer, from Joe Khann, a local Muslim man, would surprise many.

“I would like to go and join them,” he says, referring to the anti-immigration protesters who have gathered several times in Epping. 

“We have this problem within our own communities, and people don’t talk about it. We feel exactly the same and we understand how the English feel with the immigration,” he explains.

still from Johnson VT on Birmingham unrest
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‘We feel exactly the same’ on immigration, says Joe Khann

“We’re having people who are getting married back home, they get married for six months, get divorced…and the government gives them all their help to get accommodation, their national insurance numbers and all that,” he says.

“We’re getting fed up within our own community because we hear this constantly.”

However, he thinks if he did try to join in protests, people would “think I’m an immigrant”.

He says he is “born here, 58, and they look at me as a foreigner or a migrant”.

Naeem agrees. “The question is for us now, as people who are born and bred in this country, what is our identity? Who are we?” he asks. 

“As a white person born in this country, you are automatically accepted. Are we going to be accepted? How many generations will it take for us to be accepted?”

Becky Johnson Birmingham anniversary
Image:
Naeem (left) says even those born in the UK question their identity

‘You have to blame someone’

Naeem is also concerned about immigration.

“We have an influx of people that we do not know about, and they have no loyalty to the area,” he says.

“I believe that the average white guy… isn’t racist, they’re just fed up,” adds Naveed. 

However, these men do have grievances, particularly with the media.

“We feel that we have a two-tier journalists system where when the colour is like mine we get different justice and when the colour is a bit paler it’s different,” Naveed says.

still from Johnson VT on Birmingham unrest
Image:
‘When the colour is like mine we get different justice,’ says Naveed (left)

‘We have become the bogeyman’

“When there’s criminality, and it’s on the news, a Muslim has to be identified by his religion,” Naeem says. 

He believes Muslims have become the “bogeyman” in many people’s minds.

“Where you don’t have housing for example, where the crime has increased, you have to blame someone,” he says.

“Prior it was the Irish community, now it’s the Muslim community.

“It’s a distraction from the actual real issues and how you can resolve them but let’s just put it on to the Muslim community for now, let’s just distract the whole nation and say look it’s the problem with asylum, it’s a problem with Muslims,” he says.

After leaving, I head over to the spot on the roundabout where my team were targeted last year.

As I stand there, my colleague sees a man imitating pulling the trigger of a gun at me from his car.

This is Britain, in broad daylight. 

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UK-France migrant returns deal comes into force

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UK-France migrant returns deal comes into force

Sir Keir Starmer and Emmanuel Macron’s migrant deal comes into force today, with detentions set to begin by the end of the week.

The “one in, one out” pilot scheme – which allows the UK to send some people who have crossed the Channel back to France in exchange for asylum seekers with ties to Britain – was signed last week, and has now been approved by the European Commission.

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It comes as 2025 is on course to be a record year for crossings.

Approximately 25,436 people have already made the journey this year, according to PA news agency analysis of Home Office figures – 49% higher than at the same point in 2024.

The prime minister and the French president hailed the deal as a “good agreement” when it was first announced during the latter’s visit to the UK last month.

The scheme also means that anyone arriving in a small boat can be detained immediately, with space set aside at immigration removal centres in anticipation of their arrival.

Sir Keir said the ratification of the treaty will “send a clear message – if you come here illegally on a small boat you will face being sent back to France”.

Ministers have so far declined to say how many people could be returned under the deal, however, there have been reports that under the scheme only 50 people a week will be returned to France.

Analysis: Deal will need to go much further to work

Sky News political correspondent Rob Powell said while it was a “policy win” for the government, the numbers must eventually “go a lot higher” than 50 per week if it is to work as a deterrent.

“The average crossing rate is about 800 a week, so this will need to go up by a sizeable factor for that message to start seeping through to people trying to make that crossing,” Powell added.

The aim will be to make asylum seekers believe the “risk of going back to France is so big that they shouldn’t bother parting with their cash and paying smugglers” to make the crossing.

Read more:
What is the UK-France migrant returns deal?
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Migrants in Dunkirk, France, preparing to cross the English Channel
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Migrants in Dunkirk, France, preparing to cross the English Channel.

The Conservatives have branded the agreement a “surrender deal” and said it will make “no difference whatsoever”.

Under the terms of the agreement, adults arriving on small boats will face being returned to France if their asylum claim is inadmissible.

In exchange, the same number of people will be able to come to the UK on a new legal route, provided they have not attempted a crossing before and subject to stringent documentation and security checks.

The pilot scheme is set to run until June 2026, pending a longer-term agreement.

Home Secretary Yvette Cooper will face questions on the agreement on Sky News Breakfast this morning.

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Police warn of mass arrests if Palestine Action protest goes ahead

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Police warn of mass arrests if Palestine Action protest goes ahead

Police are warning of mass arrests if a protest in support of the banned group Palestine Action goes ahead on Saturday.

Hundreds of people are expected to turn out for the demonstration, which is understood to be planned for London.

However, the Metropolitan Police said “anyone showing support for the group can expect to be arrested.”

“We are aware that the organisers of Saturday’s planned protest are encouraging hundreds of people to turn out with the intention of placing a strain on the police and the wider criminal justice system,” said a spokesperson.

The organisers, a pressure group called Defend Our Juries, denied their protest will try to overwhelm the police and justice system.

“If we are allowed to protest peacefully and freely, then that is no bother to anyone,” said the group in a statement.

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What’s happening to Palestine Action?

Palestine Action was banned under terrorism laws after two aircraft were damaged at RAF Brize Norton on 20 June.

Home Secretary Yvette Cooper said the vandalism of the planes was “disgraceful” and accused the group of a “long history of unacceptable criminal damage”.

The ban means membership of, or support for, Palestine Action is a criminal offence punishable by up to 14 years in prison.

More than 200 people supporting the group were arrested at Defend Our Juries protests across the UK last month, many of whom held placards with the message: “I oppose genocide, I support Palestine Action.”

Downing Street has urged people not to attend this weekend’s protest.

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Monday's protesters waved flags and banged pan lids
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Monday’s protesters waved flags and banged pan lids

It comes after around 40 people gathered outside Labour HQ on Monday to protest the party’s stance on Gaza.

They were watched by a small group of police officers as they chanted phrases including: “Shame on Keir Starmer, shame on the Labour Party, shame on David Lammy.”

Separately, the Board of Deputies of British Jews has also confirmed it will protest this weekend, with community organisations marching through central London to Downing Street on Sunday.

They are calling for the government not to recognise the state of Palestine without all hostages taken by Hamas being released.

Last week, Sir Keir Starmer said he planned to recognise Palestine by the UN General Assembly meeting in September, unless Israel met certain conditions including agreeing a ceasefire and improving the humanitarian situation in Gaza.

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