Tory minister in jibe at Liverpool over Birmingham bankruptcy

A senior Conservative minister has fired a jab at Liverpool as she criticised management of a bankrupt Midlands council.

Last month, Birmingham Council effectively declared bankruptcy when it informed the government it had potential liabilities reaching up to £750m regarding equal pay obligations. However, the city does not have the funds to meet those financial demands.

In her speech to the Conservative Party conference in Manchester, Penny Mordaunt MP, Leader of the House of Commons, compared the situation to 1980s Liverpool.

Speaking before the Prime Minister, Ms Mordaunt, the MP for Portsmouth North, said Birmingham’s response to its section 114 crisis was comparable to management of Liverpool 40 years ago. She said, “The Labour-controlled city of Birmingham Council following the Labour-controlled Liverpool City council into scuttling around, handing out redundancy notices to its own workers in the wake of bankruptcy.

“We have seen this movie before. They want to return us to the 1980s.”

Decades ago, the city council leadership refused to implement cuts on services that Westminster was demanding. They effectively voted through an illegal budget and went on to issue council employees with redundancy notices in a bid to balance the books.

It was hoped this would force the UK Government to pay out benefits and then reinstate the city staff. In her speech, Ms Mordaunt paraphrased a line first used by then-Labour leader Neil Kinnock who in 1985 accused Liverpool Council of “hiring taxis to scuttle round a city handing out redundancy notices to its own workers.”

Speaking last month when the government announced Birmingham would join Liverpool in having Whitehall appointed commissioners oversee the running of services, city council leader Liam Robinson said Liverpool was not “at the financial brink that other councils across the country either are or are approaching.”

Cllr Robinson was keen to lay the finger of blame for poor authority finances nationwide at the UK Government. He said despite being confident in Liverpool’s current position, the council could not afford to let its guard down.

He said, “We know because of the way local government finance right across this country is broken, and particularly city councils like our own where we’ve got high levels of deprivation, aren’t getting the levels of finance we need, we’ve still potentially more challenging decisions to take. We’re in a robust position and similar to the majority of councils, but we’re not taking anything for granted.

“We want to be honest with everyone. We want to reassure people that the city council is not going to be in that sort of crisis moment that other local authorities are.”

Image: UK Government – Cabinet Ministers Announcements, CC BY 2.0

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