Senior police chief could lead inquiry into Birmingham City Council financial crisis with the DLUHC

A formal inquiry into Birmingham City Council’s financial crisis could be headed up by a former senior police chief.

Michael Gove, the Secretary of State for the Department for Levelling Up, Housing and Communities (DLUHC), is set to launch a statutory inquiry into the council following its effective bankruptcy amid a £760 million equal pay bill and botched IT installation.

He is set to invoke never used before powers granted by the Local Government Act 1999 to officially look into the crisis which has resulted in a 21 per cent council tax for residents amid drastic cuts to services.

Such an inquiry would have the power to compel witnesses to attend and give evidence, and also to compel the disclosure of documents. Evidence will be taken under oath. No names have been offically given for who will chair an inquiry, but the DLUHC has not denied - nor confirmed - that a former senior police chief will be appointed. It is expected that full details will be issued in the coming weeks.

Birmingham City Council is currently being run by Government commissioners headed by Max Caller at a cost of £10,000 a day following its issuing of Section 114 notices, in which it effectively declared itself bankrupt in September last year.

Cllr Robert Alden, Leader of the Opposition and Birmingham Local Conservatives added: “Residents deserve to know how this happened. Why they are being hit with the double whammy of higher taxes and fewer services, and why did the Labour Administration ignore the warning signs all around them?”

Details of the planned formal enquiry have emerged as reports have claimed that the authority’s debts, including a £760 million equal pay liability bill could be overstated. The Guardian has reported that sources inside the Labour-led council said that the local authority’s finances were in disarray as a result of the faulty IT system rollout which resulted in no accurate accounts for the past two years.

But a DLUHC spokesperson told BirminghamWorld: “Birmingham City Council faces this financial situation following its failure to get a grip of the significant issues it faces and years of severe mismanagement. 

“This is why commissioners were appointed in October 2023 to protect residents and taxpayers in the city. Commissioners have the Secretary of State’s full support in taking whatever steps are necessary to drive forward the required improvements.”

In response to claims that Birmingham City Council debts could be miscalculated a spokesperson for the authority told the Guardian: “A budget for the next two years was approved by full council in March. We must now focus on how we spend what we have in the most effective way, and we are committed to getting the basics right across a whole range of service areas.”

The DLUHC has also pointed out that Caller has previously noted that the financial challenges facing the Council are acute and, despite some early progress, the situation is worse than Commissioners had initially expected.  

Gove has also stated in his responses that the Council must continue to listen to, and work with, Commissioners to ensure the Council’s savings plans are delivered to achieve a balanced budget for 2024/25 and beyond.