Commissioners announced to oversee cash-strapped Birmingham City Council

The commissioners appointed to oversee Birmingham City Council after it declared itself in financial distress last month have been announced.

The Department for Levelling Up, Housing and Communities (DLUHC) wrote to the city council’s chief executive, Deborah Cadman, on Thursday to inform her that leading local government figure Max Caller has been confirmed as the lead commissioner.

It comes after the largest local authority in Europe revealed that it could not balance its books and issued a section 114 notice on September 5, effectively declaring bankruptcy, prompting DLUHC Secretary of State Michael Gove to announce that he was minded to intervene and send in commissioners.

Birmingham City Council inquiry
People walk through Chamberlain Square by Birmingham Town Hall (Jacob King/PA)

The Secretary of State has also appointed two political advisers to support the authority – Lord John Hutton, a defence secretary and business secretary under the previous Labour government, and John Biggs, former executive mayor of the London borough of Tower Hamlets.

In an email to Ms Cadman, the DLUHC said of the appointments: “These individuals are best placed to take up these roles directly, due to their individual knowledge and experience in local authority leadership, decision-making, governance, finance, HR, IT and commercial development.

“The Secretary of State recognises the expertise of his appointees and is confident that they will be key to resolving Birmingham City Council’s issues as quickly and effectively as possible.”

In response to the appointments, leader of the council John Cotton and Ms Cadman vowed to work “constructively and collaboratively” with the commissioners to tackle Birmingham’s challenges.

They said in a statement: “Max Caller is a vastly experienced local government expert with a strong track record in transforming and improving councils and we welcome his appointment as the lead commissioner.

“We believe his knowledge of the city and his previous experience as a non-executive adviser to the authority will be an invaluable asset.

Birmingham City Council inquiry
A general view of Council House in Birmingham (Matthew Cooper/PA)

“That work is already under way and the expert input from the commissioners will be invaluable as we work to transform the council and get the budget back on track.”

The section 114 means any new council spending in the city, with the exception of protecting vulnerable people and statutory services, must stop immediately.

It came as the council admitted it had an estimated £760 million equal pay liability.

The authority said it does not have sufficient resources to cover the potential liability and has also identified a budget shortfall for the current financial year of £87 million, which is projected to rise to £165 million in 2024/25.

Communities Secretary Michael Gove said: “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.”

Birmingham Local Conservatives have also welcomed the support of the commissioners.

Councillor Robert Alden, leader of the opposition and Birmingham Local Conservatives, said: “Labour now have one last chance to show commissioners that they understand the gravity of the situation they have created and that they are both willing and capable of acting accordingly.

“That must start with immediately fixing the mess they have created since 2017 and ensure that all staff are paid fairly.

“Until that situation is resolved, the bill will keep going up and residents will continue to suffer.”

Councillor Ewan Mackey, the deputy leader of Birmingham Local Conservatives, said: “We hope that the appointment of two very significant figures from the Labour Party, Baron Hutton and John Biggs, alongside the team of commissioners, will enable constructive communication and action from the Labour leadership here in the city.”

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