By james art Thus the first report on the council’s work was published
Government-appointed commissioners have warned they could “exercise their full powers” if Birmingham City Council fails to overcome its financial crisis.
Commissioners sent by the previous Conservative government to oversee the rebuilding of the council said in a new report that the challenge facing the Labour-run council “cannot be overstated”.
Its financial woes have already led to an unprecedented and painful budget that was passed earlier this year, affecting libraries, rubbish collections, day centres, youth services, arts and culture, street lighting and much more.
The first of the commissioners’ six-monthly reports, from this April, already sets out the pressing issues at Birmingham City Council (BCC) and how it can get back on its feet.
“The road to recovery is long, but it is also narrow,” they wrote. “The BCC needs to take very careful steps, in a deliberate order, before first securing financial stability.”
They then warned of what could happen if the council fails to address its huge financial challenge.
“Commissioners have been given significant powers by Secretary of State Michael Gove,” they wrote in April.
“We have chosen not to use these powers to their full extent and instead seek to manage the council and support it to make the right decisions.
“However, we are prepared to take greater action if the council fails to take the necessary steps.”
Mr Gove, a former secretary of state for local government, said last year that commissioners had the power to make decisions directly “if they felt it was necessary”.
According to the commissioners, there are three particularly critical issues that need to be addressed over the next two years.
These were:
Obligation for equal pay and ensuring fair treatment of workers.
The austerity program cuts the council’s budget by around £300 million.
The council’s need to release assets for sale to realize £500m over the next 12 months and a further £250m next year.
“If the council fails any of these three challenges, the viability of the BCC as an organization will be in doubt,” the commissioners said.
“Achieving this will require iron discipline and decisive, ambitious political and officer leadership.
“If the will of management wavers on any of these points, the commissioners will step in to exercise their full powers to provide services to citizens.”
Jim McMahon, minister of state for local government, said in response to the report that he wanted a more equal relationship between the council and the new Labor government.
“Local councils must be relevant, legitimate and dignified,” he said.
“This Government is committed to achieving this, which will require realigning the relationship between local and central government and establishing partnerships built on mutual respect, genuine collaboration and meaningful engagement.”
“There is still more to be done,” he added. “But I want the intervention to move as quickly as possible to a model based on a more equal partnership with the council so that it can increasingly lead its own recovery.”
He also said he was grateful for the “significant oversight and guidance” from commissioners and asked for a second report in January assessing the council’s progress.
John Cotton, leader of Birmingham City Council, said he welcomed the Chief Commissioner’s report.
“We recognize that while progress is being made, there is much more to do in our ongoing efforts to ensure we become a financially sustainable, well-run council that delivers good services,” he said.
“We continue to engage constructively with the new Government and, like councils across the country, look forward to both this month’s Budget and the Local Government Finance Agreement later in the year, which will set out a one-year emergency package of support for local councils.”
He said the government had also committed to a multi-year deal following next year’s spending review, which could give councils “much needed clarity” and allow them to plan for the future.
“However, we face another very difficult budget and it remains clear that the pace of change needs to increase further as further savings are identified and we transform services,” he added.
“Our new managing director, Joanne Rowney, is focused on this challenge and there will be no concessions as we work together to get the council back on track.”
Birmingham Labor councilor Jamie Scott said he was pleased to see the new minister wanted to work constructively with the council and have a “more equal relationship”.
The blame game that followed this year’s budget saw Coun Cotton take aim at “14 years of neglect by the previous Tory government” as Conservative politicians pointed the finger at mistakes made by the Labor administration in the council.