Birmingham Commissioner Anticipates Unavoidable Council Tax Hike

Max Caller, the lead commissioner appointed by the government to oversee Birmingham City Council’s finances following its declaration of effective bankruptcy, has indicated that a further 10% council tax increase is likely unavoidable. He stated that the council’s leadership has been compelled to make “painful” decisions. Mr. Caller noted that the Secretary of State’s decision to remove a penal rate of interest applied to the government’s financial support was “of an advantage” to the council, as it would have otherwise pushed required payments even higher. He also expressed confidence in the authority’s political leadership to resolve the challenges it faces. Mr. Caller emphasized that his role was to oversee decision-making rather than to implement changes directly. While leaders have not yet discussed whether residents will experience this council tax increase in the upcoming budget, Mr. Caller stated he sees no way the rise can be avoided. He confirmed, “The current proposals, which have been reported to the council’s cabinet, include that 10%.” He elaborated that the council’s finances offered no flexibility, as the authority continued to struggle to operate within its means. Mr. Caller explained, “At this moment, things are not good in terms of prospects for next year’s budget.” Mr. Caller conveyed his admiration for council leader John Cotton and senior politicians, though he offered less praise for officers. He stated, “I have no doubt in the commitment of John and his people at a political level,” but added, “[But] the council has however, struggled at officer level to deliver at pace.” He further remarked, “My experience of councillor Cotton and his executive team is they’re committed to getting this council back on his feet.” He indicated that the decisions being made were “difficult” and “painful,” citing the potential sale of city assets as an example. He added that most authorities would not retain assets providing less than an 8% return, noting that these were costing more to maintain than they were financially generating. Mr. Caller observed that leaders were “still doing the very painful stuff” and had not yet fully addressed procurement savings necessary to sustain services. Addressing a recent dispute concerning commissioners’ exercise of powers over a proposal to close four day centres, he stated that delaying a decision was incurring costs of approximately £100,000 per month. He clarified that the council had the opportunity to scrutinize the proposal and that commissioners “very, very rarely” utilized their authority to prevent a call-in. “If there had been no scrutiny, that would have been different,” he remarked. For more from BBC Birmingham, follow on BBC Sounds, Facebook, X and Instagram. Copyright 2024 BBC. All rights reserved. The BBC is not responsible for the content of external sites. Read about our approach to external linking.