Birmingham City Council has effectively declared itself bankrupt a year after hosting the Commonwealth Games ©Getty Images

Birmingham City Council has declared itself effectively bankrupt a year after hosting the Commonwealth Games.

Europe’s largest local authority confirmed it had issued the declaration that it cannot balance its books.

They are now set to seek financial help from the United Kingdom Government in London to help resolve the situation.

The situation has been caused by £760 million ($955 million/€890 million) bill to settle equal pay claims.

In May, Ian Ward was controversially removed as the Leader of Birmingham City Council and replaced with John Cotton.

Ward had led Birmingham’s successful bid to host the 2022 Commonwealth Games and oversaw the delivery of the event.

It followed after an internal report that found the leadership of the Labour Party group at Birmingham City Council was "dysfunctional" citing instances of racism, misogyny and harassment.

The decision to declare itself bankrupt followed the controversial removal of Ian Ward, who had overseen the city's bid and successful delivery of the Commonwealth Games, as the Leader of Birmingham City Council ©YouTube
The decision to declare itself bankrupt followed the controversial removal of Ian Ward, who had overseen the city's bid and successful delivery of the Commonwealth Games, as the Leader of Birmingham City Council ©YouTube

"Today’s issuing of a Section 114 Notice is a necessary step as we seek to get our city back on a sound financial footing so that we can build a stronger city for our residents," Birmingham City Council said in a statement.

"Despite the challenges that we face, we will prioritise core services that our residents rely on, in line with our values of supporting the most vulnerable."

The Commonwealth Games had been backed by £778 million ($978 million/€911 million) of public funding.

Last October, it was revealed by the UK Government that Birmingham 2022 had underspent by £60 million ($75 million/€70 million).

A fund has been established to increase access to sport and culture, boost the West Midlands’s reputation as a host for major events and drive inward investment and tourism.

Birmingham was last week awarded next year’s edition of the SportAccord World Sport & Business Summit.

It is due to be the first edition of the Olympic Movement’s biggest networking event since the Gold Coast in 2019 due to the COVID-19 pandemic.

Birmingham was last week announced as the host of next year's SportAccord World Sport & Business Summit ©ICC
Birmingham was last week announced as the host of next year's SportAccord World Sport & Business Summit ©ICC

The event is scheduled to be held in Birmingham's world acclaimed International Convention Centre in the heart of the city between April 7 and 11.

Following the announcement, Cotton had sad: “One year on from hosting the best Commonwealth Games that this country has ever seen, we have the opportunity to further market and promote our city, its venues and infrastructure to the international sporting community.

“We want Birmingham to have a pipeline of major sporting and business events over the decade and this summit has the potential to help us deliver this, maximising the impact of the Legacy Fund.”

Today’s announcement will not affect the staging of SportAccord, it has been promised.

"We have been reassured by our partners at Birmingham and the West Midlands that there is no risk to the hosting of the SportAccord World Sport & Business Summit, which has funding fully secured from the Birmingham Commonwealth Games Legacy Fund for the West Midlands Region," a spokeswoman for SportAccord told insidethegames.

Birmingham is also due to host the European Athletics Championships in 2026.