The Commons is expected to hear that Levelling Up secretary Michael Gove favours intervention in Birmingham, with ministers setting out the first steps
By Vanessa Pearce & Rob Mayor
BBC News, West Midlands
Emergency measures to help run Birmingham City Council during its financial crisis are expected to be announced by the government later.
It is thought commissioners could be sent in to oversee the effectively bankrupt authority.
The Commons is expected to hear that Levelling Up secretary Michael Gove favours intervention, with ministers setting out the first steps.
The council is facing the prospect of a £760m bill to settle equal pay claims.
It has also warned the bill is increasing by £5m to £14m each month.
The city’s Labour leader, John Cotton, has said he has met Mr Gove and been having ongoing communication with his department and the Local Government Association as the authority recognised its challenges and a need for assistance to address them.
But a government source told the BBC the scale of difficulties was “much worse than thought” and accused the authority of failing in its basic duties.
The council is also facing a projected deficit in its budget of £87m.
As a result of the inability to balance the books, it earlier this month announced all new spending would cease, although services it had a statutory duty to provide – including education, social care and waste collections – would continue.
Two months before the issuing of that Section 114 notice, which formally outlined the constraints, the council said it had taken the decision to stop spending on all “non-essential” services. What those are have yet to be announced.
The council has halted all but essential spending
On Monday, the council’s chief executive, Deborah Cadman, wrote to staff to say the authority had been in “constant discussion” with the government.
“I will make sure I let you know when there is an update to share,” she added.
The council is set to formally ask the government for “exceptional financial support”, likely to take the form of permission to borrow money to service debt, or sell assets, such as buildings and land, to raise cash to deal with its financial liabilities.
This has led to speculation over which assets could go.
Prof Tony Travers, visiting professor in the London School of Economics’ Department of Government, said selling off assets “would not provide money immediately to relieve ‘annual’ budget pressures”.
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