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,…