Council leader calls for a "reset" after financial crisis

Birmingham City Council leader John Cotton has warned that there can be no let-up in efforts to fix the council's finances, as he called for a "reset" of how the authority works.

Three reports are going to the council's cabinet on 12 December: the latest financial report, an update on the recovery of the council's troubled Oracle IT system, and an independent report on governance by the Centre for Governance and Scrutiny.

"The council must change"

"I've been clear that the council must change," Cllr Cotton said. "We face some painful financial decisions in the coming months, and we must be absolutely transparent about the situation the council is in."

"There are significant historical and current weaknesses regarding governance at the council, which has clearly contributed to the current situation. There has been a lack of cultural change in the council, and this is something we must and will get a grip on."

He said progress had been made in the first phase of getting the Oracle system back on track and making sure it was safe and compliant, "but there is much more to be done".

"We need to reset our finances, reset how we deliver our services, and reset the relationship with our residents, partners and staff," he said. "There can be no let-up in this work and the cabinet and leadership team will remain focussed on working with commissioners to get the council on a road to improvement."

How the council got here

In September, the council issued a section 114 notice, meaning it could not balance its budget and all but essential spending had to stop. The main cause was the cost of settling equal pay claims, with a potential liability estimated in the hundreds of millions of pounds, and an ongoing cost that the council said it could not meet.

The council's finances were also hit by problems with the introduction of a new Oracle IT system to run its finances and human resources, which has gone far over budget.

In October, the government appointed commissioners to oversee the running of the council, the largest local authority in Europe, and to work with its leaders on a recovery plan.

Painful decisions

The council now faces the task of finding large savings, and is expected to set out plans for cuts to services, increases in council tax and the sale of assets. Residents and community groups have warned that libraries, parks, bin collections and support services could all be affected.

Cllr Cotton, who became leader in May, has said the council must be honest with residents about the scale of the problem.

Not the first time

This is not the first time the council's governance has been called into question. In 2014, a review by Lord Kerslake found serious problems with the way the council was run, and an independent improvement panel oversaw its progress for four years afterwards.

The reports going to cabinet will set out how far the council still has to go. For the 1.2 million people who rely on its services, the coming months will show what the reset means in practice.