Millions could be eased from Birmingham City Council budget burden – report

The same report suggests that figure reflected new claims of up to £14m a month until April 2025, before a job evaluation scheme was agreed with unions.

However, that deal was struck in October 2023, a month after the auditor’s report was published, and was expected to stem new claims.

Earlier this year, lead commissioner Max Caller said the bill could be less, but did not propose a figure.

In its response to The Audit Lab report, Grant Thornton said it had not audited the equal pay liability, and that work was ongoing, but to date the £760m remained “the most appropriate estimate”.

It said it was not asked to “provide any assurance on that figure” at the time the council issued its Section 114 and that the local authority had proceeded “with full knowledge that the estimate was the council’s own figure”.

However, it added that there was a further six months before the authority issued its budget, giving it time to further analyse the estimate, and there was a recommendation to review that regularly.

The Audit Lab itself cited an estimate of closer to £250m rather than £760m and called for sweeping cuts to services and sales of anything other than loss-making assets to be paused.

While the two numbers are far apart, auditing it is unlikely to be a quick task.

Birmingham City Council is the largest local authority in Europe and its 2020-21 and 2021-22 financial statements have still to be signed off by Grant Thornton.

Instead of equal pay claims, though, The Audit Lab suggests the “real drivers” for the council’s financial woes are austerity and a “disastrous” launch of a new IT system, purchased from Oracle.

Oracle itself has not commented.