Birmingham City Council was “likely never bankrupt” and its September 2023 section 114 notice was based on “unaudited and materially incorrect information”, according to accounting experts. The declaration triggered spending cuts and plans to sell £750m worth of assets, prompting the government to appoint commissioners.
James Brackley, a lecturer in accounting at the University of Glasgow, analysed the council’s 2022-25 financial accounts and claims reserves were underestimated by more than £1bn. The council’s 2022-24 accounts, published in July 2024, showed general fund reserves of £784.7m as of March 2024, compared with a forecast in November 2023 of -£677.9m.
Brackley is among 34 experts who sent an open letter to Housing and Local Government Secretary Steve Reed calling for an independent public inquiry. The letter argues the section 114 notice was “based on unaudited and … materially incorrect accounting information”.
Liberal Democrat councillor Paul Tilsley said he had always believed the bankruptcy declaration was “premature”. The council’s Conservative leader, Robert Alden, blamed the council’s “botched Oracle rollout” and “Labour’s overspends”. Council leader John Cotton defended the decision, citing equal pay liabilities, the Oracle re-implementation, and a huge budget deficit, adding the council is on track to deliver a balanced revenue budget this year.
