The United Kingdom's second largest city declared bankruptcy Tuesday because it does not have enough money to make amends for women being paid less than men in the past.
Birmingham's city council declared itself bankrupt because it doesn't have $955 million it owes to female government employees, Fortune reported.
The council, Europe's largest local authority, said it was facing a deficit of $109 million in the current fiscal year. It issued an internal notice to cut all non-essential spending.
"The Council has insufficient resources to meet the equal pay expenditure and currently does not have any other means of meeting this liability," the Birmingham City Council said in a statement. "The notice means all new spending, with the exception of protecting vulnerable people and statutory services, must stop immediately."
British Prime Minister Rishi Sunak's office offered little understanding, saying "it's for locally elected councils to manage their own budgets."
An office spokesperson added that the government is providing $6.4 billion in additional support to councils this fiscal year, according to The Guardian.
Sunak previously ruled out a bailout for Birmingham, blaming the city's leaders for mismanaging funds.
The Supreme Court of the United Kingdom in 2012 ruled in favor of a group of mostly female employees who didn't receive bonus payments that were given to those occupying traditionally male-dominated roles at Birmingham's council.
About 170 former Birmingham city council employees — including women who worked as cooks, cleaners, and care assistants — who left their jobs between 2004 and 2008 demanded compensation, The Guardian reported.
The plaintiffs said the council made payments and provided benefits to men, but not to them, doing the same level of work.
In June, Birmingham's council said it had paid $1.4 billion in equal pay claims over the past decade. However, it estimated that remaining claims would accrue at the rate of between $6.3 million and $17.6 million monthly.
"This is one of the biggest challenges this council has ever faced, and we apologize for the failure to get this situation under control," the council said at the time.
The council had been in talks with external auditors to find possible solutions.
Councils typically are funded through a combination of sources, including central government grants, parking services, and taxes, Fortune reported.
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Charlie McCarthy, a writer/editor at Newsmax, has nearly 40 years of experience covering news, sports, and politics.