Commissioners overseeing Birmingham’s financial recovery ‘not ready to go’ despite exit talks

The commissioners were sent in by the government shortly after the Labour-run council declared itself effectively bankrupt back in 2023.

The local authority has since had to take a number of drastic actions in a bid to overcome its financial woes, including unprecedented cuts to local services, council tax hikes and a huge array of property sales.

The most recent commissioners’ report on the state of play in the council’s recovery warned of high-profile risks still lingering over the authority, including equal pay issues.

But it also acknowledged that progress had been made in tackling these challenges, as well as “enhanced resilience and improved performance in some areas”.

Amid these positive steps, the commissioners wrote that an exit plan for them is being developed to set out expectations in the coming years.

“This exit plan will give absolute clarity to the council on the actions that must be completed and the operating behaviours and culture that must be in place and embedded by October 2028 [when government intervention is set to end],” lead commissioner Tony McArdle OBE said.

Speaking at a finance meeting this week, Mr McArdle confirmed that government intervention at Birmingham Council is not coming to a close yet despite talk of an ‘exit’ for the commissioners.

“I think we’re probably going to change the name of it and call it an assurance plan,” he told councillors.

“The term exit seems to have raised the excitement that somehow we had our hand on the door handle ready to go, which isn’t the case.

“We use that term [exit plan] because it’s actually the term used in guidance the government uses – but we’re going to call it something else.”

On why a plan was now being worked on, Mr McArdle said: “Quite a lot of work has gone into addressing some of [the council’s] fundamental concerns.

“It seems reasonable in the authority’s interest, and the interest of the people of this city, to understand what we believe is yet to be done in order to put us in a position where we can go to the Secretary of State and say it’s time for us to go – whenever that might be.”

He added: “It’s not the council’s plan – it will be the commissioners’ assurance plan. It’s a statement of what we believe is necessary.

“Our intention is that it will set out very clearly what we believe is still to be done, broadly when we think that should happen and how we would measure it.”

The report confirms that the plan will enable the commissioners to be in a position to ‘advise the government of the intervention’s successful conclusion in October 2028’ – or earlier if council achieves the aims before that.

‘Progress is being made’

A perfect storm of issues brought a financial crisis to Birmingham Council, including the equal pay debacle, inadequate budget setting, poor service management, demand led pressures and the disastrous implementation of a new IT system.

The fallout of the financial turmoil has also seen Labour politicians point the finger at funding cuts during the previous Conservative government.

In their report, the commissioners wrote that significant challenges remained, including equal pay, the bins strike and the council being ‘financially fragile’.

Mr McArdle told the meeting this week that there was “still quite a considerable amount that we believe we have to do in our time here”.

But the report praised the positive actions being taken, highlighting progress in areas such as housing and children’s services as well as a framework agreement on equal pay being reached.

“We are pleased to record that progress is being made […] as a result of the determination and resilience being demonstrated by the political leadership and the sense of purpose being embedded in the organisation by the managing director and the management team that she has assembled,” the report said.

“We are also transitioning the approach to the intervention towards a balanced partnership.”

The commissioners said this could mean the council takes a “stronger leadership role” in driving its own recovery.

Responding to the publication of the report, council leader John Cotton argued that the organisation had “turned a corner”.

“We are not complacent and recognise there is still much to do before we become a well-run council that delivers good services for the people of the city,” he said.