Gove reveals next steps for crisis-hit council

Credit: Department for Levelling Up

Michael Gove accused Birmingham City Council of being “beset by systemic failings over several years” which have been “exacerbated by instability and churn at senior officer level” in his letter announcing government intervention with commissioners.

The secretary of state for Levelling Up said he was minded to appoint Max Caller to head up the investigation. Caller has previously been involved in interventions at other councils including Liverpool City Council in 2021.

In a letter to council CEO Deborah Cadman, Gove outlined actions the council must now take such as:

  1. Prepare and agree on an Improvement Plan to “restore public trust” across all functions, with a particular focus on housing, waste, finance, HR, governance and corporate services. The council will report back on the delivery of the plan every six months or whenever the commissioners may direct. 
  2. Over the next twelve months review the provision and operation of corporate services to ensure the council is running smoothly and can deliver front-line needs effectively.
  3. Carry out functions in conformance with the best value duty for the people of Birmingham.
  4. Undertake measures recommended by commissioners to avoid the risk of further failure.
  5. Allow commissioners access to anything they deem necessary e.g. premises, documents, and employees and provide them from time to time with reasonable amenities and administrative support.

The announcement comes off the back of “serious governance and service delivery concerns raised by three independent sources (the Local Government and Social Care Ombudsman, the Housing Ombudsman and the Department for Education’s Commissioner for Special Educational Needs and Disability at the Council)” as well as an £80m overspend on its Oracle IT system, equal pay liability of £760m and a Labour Party-led report that unveiled a “dysfunctional climate”. 

He also said failings uncovered in the Kerslake report into the Trojan Horse affair have “unfortunately endured”. Kerslake warned in 2014 that “the authority must radically improve if it is to deliver the services residents of Birmingham deserve”.

Yesterday (September 18) the council unveiled its Financial Recovery Plan, which will be discussed at its extraordinary meeting on September 25.

In this, it revealed it was “likely” to require Exceptional Financial Support from the government, given the scale of its equal pay liabilities, as well as needing an agreement in place to capitalise on some of its revenue liabilities and repay the associated borrowing over a period of time.

Further reports and decisions will be required on:

  • Where spending will be reduced – leading to a revised Emergency Budget for 2023/24
  • A Capital Strategy and Assets Review – to identify options to raise funds and minimise borrowing costs
  • Redesigning the organisation “around citizens and within available resources” to achieve a Medium Term Financial Plan
  • Generating additional income from council-controlled companies and traded services
  • An Income Review to maximise sustainable income from all sources, including Business Rates, Council Tax, Grants and other income.

Birmingham City Council now has five days to respond to Gove’s proposals. 

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