Birmingham City Council
The UK's largest local authority by population, which issued a Section 114 notice in September 2023.
Last refreshed: 10 April 2026
How did the UK's biggest council go bankrupt?
Latest on Birmingham City Council
- Why did Birmingham City Council go bankrupt?
- Birmingham issued a Section 114 notice in September 2023 due to £760m in shortfalls, primarily from equal pay liabilities and an over-budget Oracle IT system.Source: background
- What is a Section 114 notice UK council?
- A Section 114 notice freezes all non-essential council spending when the chief finance officer determines the authority cannot balance its budget.Source: background
- Is Birmingham City Council still under commissioners?
- Yes. Government-appointed commissioners have controlled the council's financial decisions since October 2024.Source: background
Background
Birmingham City Council, the UK's largest local authority by population with over 1.1 million residents, issued a Section 114 notice in September 2023 after identifying a financial shortfall of approximately £760 million. The council's financial collapse serves as the benchmark against which Thurrock Council's own Section 114 failure is measured in the context of the 7 May 2026 elections.
The financial crisis stemmed from accumulated equal pay liabilities estimated at £1.1 billion and an Oracle IT system implementation that ran significantly over budget. The council was placed under commissioners in October 2024, with central government taking direct control of its financial decisions.
Birmingham's case established that Section 114 notices are no longer theoretical instruments. Before 2023, only a handful of authorities had ever issued one. Since then, the threshold has become a benchmark for councils in financial distress, including Thurrock, whose £1.5 billion losses from failed investment deals dwarf Birmingham's shortfall in absolute terms.