We ask lead government commissioner Max Caller if Birmingham Council Tax bills will rise

Birmingham’s newly-appointed lead commissioner tasked with cutting services to stem the council’s crippling financial situation has set his stall out early by declaring: ‘We need to operate at a sufficient pace’.

Max Caller, nicknamed ‘Max The Axe’ for his no-nonsense approach at other doomed councils, says it’s time to get to work in order to bring in funds to help combat equal pay liabilities and alarming budget shortfalls.

Birmingham City Council owes out up to £760m in new equal pay claims – that’s on top of the £1 billion they’ve already shelled out to underpaid workers. There’s also the £100m fee to fix its IT system, Oracle, while it faces an immediate budget shortfall of £87m for 2023/24.

Mr Caller, earning a reported £1,200 a day, has already warned of a sharp increase in council tax while also outlining how valuable council services and jobs are at risk. Speaking to the Local Democracy Reporting Service on his very first day in office, Mr Caller said: “The council’s got to deliver its recovery programme. It’s got to do that first and it’s got to do that at pace because, until it does, that will haemorrhage money and none of that money can be used for jobs and services so, actually, we need to get on with things.

“We need to operate at a sufficient pace and we need to solve the Oracle problems, solve the equal pay problems and make sure the council knows where it is in terms of its financial position. And then the council can work out its priorities. Until we do that there are more services and more local jobs at risk. It’s doing what we need to do first that matters.”

Pushed on how he plans to combat the council’s financial crisis, he added: “There are a number of ways that the council will have to close its gap because the law requires council’s to set balanced budgets each year. At the moment, you’re in a section 114 position where, effectively, the council’s finance chiefs are saying the council cannot meet their liabilities and cannot set a balanced budget so they have to sort that out. There are only a number of ways to fix that.

“You can fix that by reductions in your outgoings which mean less services. You can do that by getting the money that is owed in terms of improving the council tax collection rate and improving fees and charges.”

What government Max Caller said about potential Council Tax rises in Birmingham amid the authority’s ‘bankruptcy’

Mr Caller said: “If you get permission from the Secretary of State you can raise taxes, Council Tax, but you can’t do that without permission from the Secretary of State. Or you can, if you have a viable financial recovery plan, take a bit more time over it by getting authority from the Secretary of State to capitalise on what normally would be revenue expenditure and pay it back over a longer term.

“The problem with that is that the capitalisation direction doesn’t come with any funds. If the council hasn’t got any money to start with, it’s got no way of paying the debt charges from that borrowing. It’s like you taking out a mortgage having no salary that enables you to pay the mortgage. What do you do? The only solution you have for that is to sell surplus assets.

“Some of that will be pretty straightforward and some of it won’t. Some things you wonder why the council held on to those assets anyway and, until you look at all of the things the council has, you just don’t know what’s first.

“Today I couldn’t tell you - but we know the council owns almost 40 per cent of the land area of the city. It owns shops, pubs, all sorts of things. Are they absolutely crucial? Is the council maximising its return? Is it doing the deal that a proper property company would do? I don’t know but we’ll look at every one of those things.”

Has Max Caller raised Council Taxes at other authority’s he has run following effective bankruptcy?

Mr Caller, who previously raised council tax at cash-strapped Slough by 9.99 per cent, also commented on how the council have ‘failed to take the decisions at the right time’ and referenced the Government-ordered Kerslake Review in 2014 when then-leader Sir Bob Kerslake was forced to carry out an independent review of the governance and organisational capabilities of Birmingham City Council.

Asked if those in charge at Birmingham Council are inept given the current crisis, Mr Caller replied: “Inept is not a word I would use but the council has failed to take decisions at the right time about issues it has known about for a very long period. You go back to Kerslake (2014). It’s been a long time since Kerslake, many of the decisions that needed to be taken were known about then. Equal pay hasn’t suddenly come out of a clear blue sky; the court case was years ago. In Hackney, we sorted out equal pay 20-odd years ago.”

Birmingham City Council leaders will meet on Thursday (October 12) to discuss a new job evaluation scheme in relation to equal pay.