Birmingham City Council faces a substantial overhaul as Levelling Up Secretary Michael Gove confirmed a five-year intervention to address the city’s severe financial and governance issues. The move comes after a ‘section 114 notice’ issued by the council revealed a backdated equal pay liability of up to £760 million, along with an in-year budget deficit linked to the implementation of an IT system.
A team of six commissioners, led by experienced local government professional Max Caller CBE, has been appointed to provide advice, challenge the council, and make decisions directly if necessary. The commissioners, equipped with powers related to governance, finance, and recruitment, bring expertise in local government improvement, finance, HR, equal pay, housing, ICT, and commercial projects.
Joining the team as political advisers are Lord John Hutton, a former Defence and Business Secretary, and former Mayor of Tower Hamlets, John Biggs. While advisers lack the legal power of commissioners, they will support the political leadership of the council in making challenging decisions.
Levelling Up Secretary Michael Gove expressed disappointment in Birmingham City Council’s failure to address significant issues, from equal pay liabilities to the implementation of its IT system. Gove emphasised the government’s commitment to protecting taxpayers’ interests and announced the intervention to return the council to a sustainable footing.
The decision to intervene follows a representation period of five working days, during which stakeholders’ views on the proposed intervention were considered. The move aims to protect residents and taxpayers in the city, especially in the wake of the council’s admission of financial challenges and subsequent ‘section 5’ and ‘section 114’ notices.
In light of these developments, a local inquiry is set to be launched to examine fundamental questions about the city’s issues. It will delve into the ongoing management of problems identified in Lord Bob Kerslake’s 2014 review of the authority, which exposed a culture of avoiding issues rather than addressing them directly.
