Whether the city is broke or not, the reputational damage is done – and we need to rebuild

This week, Birmingham City Council published its budget papers alongside a declaration from the Leader of the Council, John Cotton, that the city is “no longer bankrupt”. 

The Liberal Democrats responded angrily. Councillor Roger Harmer called the claim “beyond shocking”, arguing that simply managing not to declare bankruptcy is hardly a triumph.

Politically, none of this is surprising. But step back, and the argument itself becomes part of the problem.

Debating the detail on a topic we shouldn’t even be discussing

Whether Birmingham is technically bankrupt, recently bankrupt, or no longer bankrupt in the strict accounting sense, is almost beside the point. The real scandal is that one of Britain’s great cities has been reduced to debating the label at all.

This is Birmingham. A city that powered the industrial revolution, rebuilt itself after war and still carries extraordinary economic and cultural weight. Yet residents experience decline not through balance sheets, but through uncollected bins, crumbling roads, fly-tipping, broken systems and rising council tax.

Closing a budget gap is not a renaissance. Not declaring bankruptcy is not a victory. It is the bare minimum required to function.

Labour on the way out?

Let me be clear about something else, because it matters. John Cotton is a decent man. A caring man. A thoughtful man. That is not in doubt. But he must also know that Labour’s chances of retaining control of the council in a matter of weeks are slim, and that real power over Birmingham’s finances now sits with government commissioners and, ultimately, Westminster. In that context, declaring the city “no longer bankrupt” risks sounding less like leadership and more like resignation.

Councillor Harmer is right on one point – “Having a council not declare bankruptcy is the bare minimum.” 

That line cuts through the noise.

Reputational rot

But endlessly branding Birmingham as “bankrupt” is not cost-free either. It damages the city’s reputation, reinforces decline and locks us into a narrative of failure. At a mischievous level, it is political theatre. At a serious level, it becomes civic self-harm.

This crisis was not created by one leader or one budget. It reflects years of mismanagement, weak governance and structural pressures that were ignored until collapse forced action.

Dignity

So no, this is not really about bankruptcy. It is about dignity.

The disgrace is not that Birmingham stumbled. Cities stumble. The disgrace is that we now seem more comfortable arguing about whether the stumble “counts” than confronting how far we fell, and how hard it will be to stand tall again.

–