The leader of Birmingham City Council said he faced “difficult decisions” as councilors approved a financial recovery plan.
The authority essentially declared bankruptcy earlier this month, partly over a £760m pay equality bill.
During Monday's often contentious four-hour meeting, council members took turns asking how Europe's largest authority arrived at this position.
In the end, they voted to adopt four recommendations.
These included the adoption of the section 114 notice, which essentially recognized that the Council's expenditure obligations exceeded its revenue; agree on spending control measures until a new budget is approved; Support activities to help you manage your financial pressures; and receive a new report and emergency budget next month.
The decision came less than a week after the government announced it would send commissioners to help run local government due to the financial crisis.
Birmingham City Council is facing a budget deficit of £87m and is blaming pay equality on the rollout of a new IT system, the forecast cost of which has risen from £19m to £100m.
union representatives held a rally outside the meeting to show their support for workers amid fears of future job cuts.
At the village hall, finance director Fiona Greenway gave members an overview of the position, telling them they were “facing an unprecedented financial challenge”.
A report on the recovery plan presented to the meeting said that "the work to address the situation must be urgent, will require difficult decisions about what we deliver and how we operate, and that this will result in a smaller organisation."
However, he said further decisions would be required as details developed, and a subsequent report and revised emergency budget for the year would be presented at another extraordinary general meeting in late October.
John Cotton, chairman of Council
, apologized to residents and staff for having to face “such difficult decisions”.
The local government must act “decisively”, he said, to resolve its pay equality issues “once and for all” – adding that the council was also hit by cuts in funding from central government.
He said that the decisions facing the Council were not ones “that any of us would have wanted to make”.
Mr Cotton added that he did not “underestimate” the scale of the challenges ahead but was “determined to overcome them”.
However, Conservative councilor Matt Bennett said in his response that the impact of the crisis would be devastating and described the vote as simply "a plan to have a plan".
Mr Bennett said: "When I heard the leader's answer today, one word stuck in my mind and that word is unbelievable."
The council's chief executive, Deborah Cadman, told the meeting that the financial plan would, however, help restore "certainty and confidence" in the authority's ability to address its problems.
“Our work to implement the recovery plan is urgent,” he said. “It will almost certainly lead to another organization.”
“Four Horsemen of the Apocalypse”
However, he said it also offered the council an opportunity to improve its performance.
Liberal Democrat councilor Paul Tilsley said councilors were “probably facing the worst crisis” in the history of local government.
“We have the four horsemen of the apocalypse and I would describe them as selling assets, cutting staff, reducing services and increasing local taxes to fund this,” he said.
councilor Robert Alden, leader of the opposition Conservative group, said there had been a “shameful inaction” by politicians over the summer to address their financial problems and criticized how Labor had handled the equal pay issue in the past.
The roots of equal pay claims go back to a 2012 Supreme Court ruling that found hundreds of employees, mostly women, had lost bonuses awarded to employees in traditionally male-dominated jobs such as garbage collectors, garbage collectors and street cleaners.
Despite the current situation, Mr Alden insisted that this was a community issue and that the city of Birmingham itself had a "bright future" and would rise "like a phoenix" in the face of challenges.
Analysis
There were loud protests outside Birmingham City Council's extraordinary general meeting this evening.
Many of those speaking out are concerned about jobs and services that could face cuts as the agency tries to balance the books.
There was anger at what was likely to be difficult times for the city and concern about the impending arrival of the commissioners.
Anger also on behalf of women who have earned less than men in equivalent positions for years, which is the same reason the council is in such financial difficulties.
Mr Cotton said he welcomed the Secretary of State's announcement of an inquiry into how the council found itself in a financial crisis.
Towards the end of the four-hour meeting, Councilor Sharon Thompson, the council's deputy leader, said she had apologized to staff in a recent webinar for the uncertainty they faced.
“We can be a better council if we take the opportunity to recalibrate and refocus,” he said.
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