Tax hikes are inevitable, says Birmingham City Council commissioner – BBC.com

The man in charge of fixing Birmingham City Council’s finances fears a further 10% rise in council tax is imminent.

Max Kahler, the chief commissioner appointed by the government to step in after the body declared itself effectively bankrupt, said leaders had to make “painful” decisions.

Mr Caller said the Secretary of State’s decision to remove penalty interest applied to government financial support was a “win-win” for the council, which would increase required payments even further.

Mr Kaler also said he had faith in the body’s political leadership to solve the problems it faced.

He emphasized that he was there to oversee decision-making, not to make changes directly.

Leaders have yet to discuss whether residents will see their council tax increase in the upcoming budget, but he said he saw no way the increase could be avoided.

“The current proposals that have been reported to the council’s cabinet include that 10%,” he said.

There was no leeway in the council’s finances as the authority was still struggling to live within its means.

“Things are not looking good at this point in terms of the outlook for next year’s budget,” Mr Kaler explained.

He said he was impressed by council leader John Cotton and senior politicians but did not praise many staff.

“I have no doubt about the commitment of John and his people at the political level,” he said. “[But] however, the council is struggling at officer level to keep pace.

“My experience with Councilor Cotton and his executive team is that they are determined to get this council back on its feet.”

He said they were making decisions that were “difficult” and “painful,” including whether to sell city assets.

He added that most authorities will not hold assets that provide less than an 8% return, and that they cost more to hold than they contribute financially.

Mr Caller said leaders were “still doing the very painful things” and were yet to tackle procurement savings to save services.

Speaking of a recent controversy about commissioners exercising their powers over a proposal to close four daycare centershe said delaying a decision was costing around £100,000 a month.

He added that the board was able to scrutinize the proposal and that commissioners “very, very rarely” exercised their authority to block a call.

“If there was no inspection, it would be different,” he said.