Revealed: Consultants appointed to help ‘bankrupt’ Birmingham City Council out of its financial troubles can charge up to £8,900 per DAY
- A team of commissioners has been picked to oversee Birmingham City Council
- The group can charge the cash-strapped authority £8,900 a day for service
Bankrupt Birmingham City Council is to be aided out of its financial woes by a team of commissioners – who could claim a combined fee of £8,900 a day.
On Thursday, the Labour-run council was informed by the government’s Department for Levelling Up, Housing and Communities that a team of eight commissioners would be heading their way – led by local government heavyweight Max Caller.
The commissioners will report directly to Levelling Up Secretary Michael Gove.
Mr Caller has previously served as chief executive at London boroughs of Hackney and Barnet and spent seven years as the Electoral Commissioner.
He has presided over a number of inquiries into local authorities’ finances, including an investigation into Northamptonshire County Council’s bankruptcy in 2018.
Max Caller will serve as lead commissioner for Birmingham City Council reporting to Levelling Up Secretary Michael Gove, charging the council a fee of up to £1,200 per day
Former defence secretary John Hutton, now a Labour member of the House of Lords, is one of two political advisers on the team of eight commissioners – each charging fees of up to £1,100 a day
The commissioners will report directly to Levelling Up Secretary Michael Gove
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Birmingham – which boasts the largest local authority in Europe – revealed that it could not balance its books and issued a section 114 notice on September 5, effectively declaring bankruptcy.
Mr Caller will be joined by five other commissioners, as well as two political advisers – former Defence Secretary John Hutton who is now a Labour peer in the House of Lords, and John Biggs, former executive mayor of the London borough of Tower Hamlets.
Announcing the commissioning team, Mr Gove said that ‘most decisions should continue to be made by the authority, but with the oversight of the commissioners’ who will have powers to intervene, Birmingham Live reports.
Other commissioners include:
- John Coughlan, the current commissioner for special educational needs and disability services and former chief executive of Hampshire County Council.
- Chris Tambini, the former director of corporate resources at Leicestershire County Council.
- Pam Parkes, executive director for people and transformation at Essex County Council.
- Jackie Belton, chief executive of the London Borough of Bexley.
- Myron Hrycyk, the Cabinet Office’s crown representative for Oracle, IBM and Microsoft.
As lead commissioner, Mr Caller will be entitled to fees of £1,200 per day from the local authority, while the other commissioners can claim £1,100 – totalling £8,900 each day.
The commissioners will also be entitled to expenses throughout the period of their oversight, which is not expected to exceed 150 days.
In an email to the council’s chief executive Deborah Cadman, the DLUHC said of the appointments: ‘These individuals are best placed to take up these roles directly, due to their individual knowledge and experience in local authority leadership, decision-making, governance, finance, HR, IT and commercial development.
‘The Secretary of State recognises the expertise of his appointees and is confident that they will be key to resolving Birmingham City Council’s issues as quickly and effectively as possible.’
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In response to the appointments, leader of the council John Cotton and Ms Cadman vowed to work ‘constructively and collaboratively’ with the commissioners to tackle Birmingham’s challenges.
They said in a statement: ‘Max Caller is a vastly experienced local government expert with a strong track record in transforming and improving councils and we welcome his appointment as the lead commissioner.
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‘We believe his knowledge of the city and his previous experience as a non-executive adviser to the authority will be an invaluable asset.
‘Our sole focus now is on working with the commissioners in a collaborative way to meet the immediate challenges and set the council on the journey to long-term sustained improvement.
‘That work is already under way and the expert input from the commissioners will be invaluable as we work to transform the council and get the budget back on track.’
The section 114 means any new council spending in the city, with the exception of protecting vulnerable people and statutory services, must stop immediately.
It came as the council admitted it had an estimated £760 million equal pay liability.
The authority said it does not have sufficient resources to cover the potential liability and has also identified a budget shortfall for the current financial year of £87 million, which is projected to rise to £165 million in 2024/25.
Birmingham Local Conservatives have also welcomed the support of the commissioners.
Councillor Robert Alden, leader of the opposition and Birmingham Local Conservatives, said: ‘Labour now have one last chance to show commissioners that they understand the gravity of the situation they have created and that they are both willing and capable of acting accordingly.
‘That must start with immediately fixing the mess they have created since 2017 and ensure that all staff are paid fairly.
‘Until that situation is resolved, the bill will keep going up and residents will continue to suffer.’
Councillor Ewan Mackey, the deputy leader of Birmingham Local Conservatives, said: ‘We hope that the appointment of two very significant figures from the Labour Party, Baron Hutton and John Biggs, alongside the team of commissioners, will enable constructive communication and action from the Labour leadership here in the city.’
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