Ouyang Kaiyu: British local finances face the ＂bankruptcy crisis＂

Source: China News Agency

Author: Ouyang Kaiyu

"There is a problem with the operation of this country, and the operation of the city is the same." For the news of the bankruptcy of Nottingham, the citizen Johnson said frustrated that the local government went bankrupt and the local residents were suffering from the heavy life.

Nottingham, the capital of Nottingham County, central Britain, announced the fact that the facts were bankrupt.Nottingham is an important industrial city in Britain and the second largest trading distribution center after London. In 2019, it ranked 108th in the top 500 list of global cities.

The Notting Han City Council quoted Article 114 of the 1988 Local Government Finance Law announced that the city council is expected to exceed 23 million pounds (S $ 38.87 million) in the 2023-2024 fiscal year.The demand for adult social service care and the increasing increase in relief expenditures for homeless people, the city council has been "pushed to the edge" and forced to declare bankruptcy.According to the city council, the official can no longer provide a balanced budget.Nottingham officials will hold a meeting in the next 21 days to discuss the problems and response measures that will face after bankruptcy.

The three members of Nottingham, Nadia Whitham, Alex Norris and Lilian Greenwood, said in a joint statement: "The government fails to master unprecedented social care and homelessnessThe situation where the demand can be surged has now pushed the city council to the edge of the collapse, forcing it to issue the 114th notice. "

In a short period of time, Nottingham City announced that bankruptcy will lead to strict restrictions on municipal expenses, and some welfare improvement projects and large infrastructure construction will be temporarily put on hold.The local people are worried that the quality and efficiency of legal service projects such as public security and transportation will be greatly reduced due to local finances.As the city is labeled with a "bankruptcy", the prospects of attracting investment in the future will also be affected.

The local finances in the UK are relatively independent, and the British Prime Minister's government said that it will not provide rescue for Nottingham.Tangning Street also stated that the government has previously raised the funding on the local committee, and the local committee should be responsible for its budget.

More than two months ago, Birmingham, the second largest city in the UK, announced that it has entered a state of bankruptcy, and the city's bankruptcy is related to its high claim bills.Earlier, more than a hundred women in the city's industries such as education, catering, and other industries brought Birmingham City Government to court because they had poor salary and treatment, and demanded equal pay for equal work. The Supreme Court finally sentenced it to victory.

Since 2012, the Birmingham City Government has paid nearly 1.1 billion pounds of compensation for this.In July this year, the city government revealed that there are still 760 million pounds of related compensation.The Birmingham City Council stated that the cost of equal pay for the same workers is increasing at a rate of 5 million pounds to 14 million pounds per month. The city must provide funds for the accumulated compensation debt so far, but there is no resources to do so. ThereforeSuspension is non -necessary expenditure.

When Birmingham announced bankruptcy, the group "Municipal Official Special Interest Group" composed of 47 local governments in the UK warned that about 26 local officials may go bankrupt in the next two fiscal year.There are "fundamental system issues" in the British local government's financial system, resulting in more and more city councils close to the edge of bankruptcy.

At present, the British economic growth has fallen into stagnation. Under the triple pressures of high inflation, high debt, and high interest rates, more and more local governments have difficulty in finance.The bankruptcy crisis of the British local governments has been in front of them.Since 2020, six British local governments, including Srook, Croydon, Slau, and Bei'an Puton, have announced bankruptcy. Birmingham is the seventh and Nottingham is the eighth.

Some media analysis said that Britain's inflation rate began to increase from mid -2022, reaching 11.1%at the end of last year, a new high in 40 years.Subsequently, the inflation rate of double digits was maintained for several months.Although the inflation rate has dropped to 4.6%, it is still far higher than the British Central Bank's target 2%.

The Institute of National Economics and Social Research of the British Think Tank pointed out that the downward of the British economy has caused local governments to be difficult to sustain.The sequelae are gradually becoming the challenge facing the British economy.

Analysts also pointed out that about one -tenth of the local governments in the UK face the risk of bankruptcy. Nottingham is not the first or the last.The bankruptcy of British cities reveals the objective facts of local fiscal pressure. In the face of local debt accumulation and decline in fiscal revenue, only on the basis of realizing the sustainable growth of macroeconomics, clarify the central and local fiscal relations and open up mutual support channels, can it be possibleResolve the risk of city bankruptcy.