Government Launches Five-Year Intervention at Birmingham City Council to Address Serious Problems

In a bold move, Levelling Up Secretary Michael Gove has announced a five-year intervention at Birmingham City Council aimed at resolving the serious financial and governance issues plaguing the council.

This unprecedented intervention comes after Birmingham City Council's failure to effectively manage its equal pay liability, estimated at up to £760 million and the challenges related to the implementation of its IT system. The decision was made following a thorough consideration of stakeholder views and a period of consultation.

A team of six commissioners, led by experienced local government professional Max Caller CBE, has been appointed to guide Birmingham City Council back to sustainable financial footing. These commissioners will have extensive powers related to governance, finance and recruitment, allowing them to make decisions directly if necessary.

Their collective expertise spans various areas, including local government improvement, finance, HR, equal pay, housing, ICT and commercial projects.

Additionally, Lord John Hutton, a former Defence Secretary and Business Secretary, along with former Mayor of Tower Hamlets, John Biggs, have been appointed as political advisers to the council. While they will not possess the legal power of commissioners, their role will be crucial in supporting the council's political leadership as they navigate the challenging decisions ahead.

Levelling Up Secretary Michael Gove expressed his concern over the council's inability to address its significant issues, particularly the equal pay liability and IT system implementation, which have adversely affected residents and taxpayers. He emphasised the government's commitment to safeguarding taxpayer interests and ensuring the city's financial stability, leading to the decision to intervene.

Gove stated: "Residents have been let down by Birmingham City Council's failure to get a grip of the significant issues it faces, from its equal pay liability to the implementation of its IT system. We are always committed to protecting the interests of taxpayers and we will take whatever action necessary to ensure this happens in Birmingham."

"That's why today I have taken the decision to intervene and appoint a team of commissioners to help return the council to a sustainable footing moving forward," he continued.

The government's intervention plan was outlined in an Oral Statement to Parliament on September 19, indicating the government's intention to intervene to protect residents and taxpayers in Birmingham. The proposal underwent a five-day representation period during which views from stakeholders were carefully considered before the final decision was made.

Birmingham City Council's troubles became evident when it issued a 'section 114 notice' on September 5, admitting to the staggering equal pay liability and an in-year budget deficit linked to the IT system implementation that exceeded the council's available resources. Subsequently, on September 21, the council issued a 'section 5 notice' and another 'section 114 notice' because it failed to secure a decision regarding its equal pay liability.

In light of these issues, a local enquiry will be initiated to delve into the root causes and management of problems facing Birmingham City Council. The enquiry is expected to address fundamental questions about the development of these issues and examine the council's handling of problems identified in Lord Bob Kerslake's 2014 review of the authority, as well as the non-statutory intervention that followed.

Lord Kerslake's independent review, initiated after the 'Trojan Horse' investigation into several Birmingham schools, revealed a pattern of successive administrations failing to address deeply rooted problems. The review also highlighted a culture of avoiding problems rather than addressing them head-on.

The intervention at Birmingham City Council marks a significant step in rectifying the long-standing issues that have plagued the city's local government.

With the newly appointed commissioners and political advisers, there is hope for a brighter future as they work together to restore financial stability and good governance to the heart of Birmingham.