Control of bankrupt Birmingham council to be handed over and inquiry launched

Michael Gove has announced he will appoint commissioners to take over Birmingham City Council and will launch a local inquiry into the authority after it declared itself effectively bankrupt.

The government’s communities secretary said he was “satisfied that Birmingham City Council is failing to comply with its best value duty” after it issued a Section 114 notice.

He added: “In line with the Local Government Act 1999 therefore, I can announce that I am today writing to the council to set out my proposal to intervene and to appoint commissioners and that I intend to launch a local inquiry in due course.

“I do not take these decisions lightly, but it is imperative in order to protect the interests of the residents and taxpayers of Birmingham, and to provide ongoing assurance to the whole local government sector.”

Warning that “the residents and businesses in Birmingham deserve better”, Mr Gove told MPs that, under his proposals, the commissioners will exercise all functions associated with the council’s governance, strategic decision-making, financial governance, and senior appointments.

Mr Gove said the commissioners will have the power to make decisions directly if needed, adding he is “minded” to implement the package he has set out and the city council has five working days to make representations.

Under his plans, the council would also – under the oversight of commissioners – draw up and agree upon an improvement plan within six months, Mr Gove said.

The plan would set out how the council will “make the necessary improvements to the whole council to return it to a sustainable financial footing”, he added.

The communities secretary said the local inquiry will “consider the more fundamental questions around how Birmingham got to this position and options for how it can become a sustainable council moving forward that secures best value for its residents”.

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