Government commissioners to run Birmingham City Council - reports

The Government has said it is continuing to engage with Birmingham City Council amid reports that Michael Gove is set to announce plans to appoint commissioners to take over the day-to-day running of the authority.

Reports have also suggested that the council, which issued a Section 114 notice on September 5, effectively declaring it was bankrupt, may be forced to sell off assets, including its stake in Birmingham Airport. The notice was issued because the council will not be able to balance its budget in the next financial year. It bans all new spending with the exception of “protecting vulnerable people, statutory services and pre-existing commitments”.

It is believed an announcement could be made by the Government as soon as Tuesday. In a statement, the Department for Levelling Up, Housing and Communities (DLUHC) said: “We continue to engage regularly with Birmingham City Council, as we have done in recent months, over the pressures it faces, including around its equal pay liability, and have expressed serious concern over its governance arrangements.

“We have requested written assurances from the leader of the council that any decision regarding the council’s issues over equal pay represents the best value for taxpayers’ money.”

The council also owns around £2.4 billion in property, including the historic council house in Victoria Square and around 26,000 acres of land and 6,500 property assets (not including housing, infrastructure and schools) such as the Library of Birmingham, the Museum and Art Gallery, Aston Hall and Sarehole Mill. All of which could potentially now be sold to generate funds. The council previously sold several assets, including the National Exhibition Centre for £307 million in 2015.

Speaking at the weekend, the leader of the Labour-run council, John Cotton, said he had met Mr Gove to discuss support for the council.

Mr Cotton told the BBC’s Politics Midlands programme: “It is clear we are facing a number of challenges in Birmingham so I would like to start by offering an apology on behalf of Birmingham City Council to the people of the city. I am apologising for the impact we know this has on citizens.

“We are having to review all of our council activity and look at where we make our spend, but my priority is that we continue focus on frontline service delivery, the things that matter most to the people of this city.”

The council has been grappling with an equal pay liability which has grown over several years. It is now estimated to stand at around £1 billion and is increasing by millions of pounds per month. It is also facing an in-year financial gap in its budget which is currently in the region of £87 million, and is having to spend around £100 million on fixing errors in the implementation of a new IT system.

Birmingham City Council declined to comment on the reports. On the sale of assets Mayor Andy Street posted on X saying: “The idea of Birmingham City Council selling its cultural assets to help its finances seems a red herring - & something I’d be totally against. An asset sale for an authority so rich in land is absolutely right - but I’m sure the focus will be on sites & land of strategic value.”