Birmingham City Council has announced that it will stop all non-essential spending to deal with its equal pay liability and the fallout from the implementation of its new IT system.
The city council is facing a bill of up to £760m to settle equal pay claims and problems with the roll out of the Oracle ERP system are set to cost the local authority £100m.
The council has appointed new advisers and will commission reviews to look into the root causes of its financial issues.
Birmingham City Council leader Cllr John Cotton said: ‘I've been clear from day one that I will take whatever action is needed to address the substantial challenges facing the council and these measures are essential to grip the situation – particularly in terms of financial controls, organisational capacity and improved governance.
‘We will be open and transparent throughout this process and the independent reviews and judge-led inquiry will ensure that there is proper accountability for these failings.’
Birmingham City Council deputy leader Cllr Sharon Thompson added: ‘This is one of the biggest challenges this council has ever faced, and we must understand how the issues have arisen to prevent a repeat in the future.
‘Given the scale of this challenge, we must impose mandatory spending restrictions. But as we have done throughout the cost-of-living crisis, we will continue to focus on tackling social injustice and inequality across our city. We will do everything we can to protect the services our residents rely on.’
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