Birmingham has better understanding of work required for recovery but “cultural dysfunction” is among risks to progress: Commissioners

Birmingham City Council continues to face significant challenges in finances, equal pay, culture, governance, services, and transformation, the local authority's Commissioners have reported.

Writing in their second report, the Commissioners said the "cultural dysfunction that led to the council's failure" remains, despite some procedural governance changes being made.

The Commissioners, who are led by Max Caller, added that "root and branch culture and governance improvement, for both officers and members", is needed to tackle the dysfunction.

The report - which was handed to the Government in late January but made public on Monday (31 March) - found that while many of the challenges and best value failures previously identified persist, in recent months, the council has "shifted towards a better understanding of the work required for recovery".

They highlighted a set of significant milestones, including building a stronger corporate team and working with trade unions to achieve an agreement to settle litigant claims on equal pay.

On equal pay, the report said that the council had implemented an extensive transformation of its waste service and a revised grading and pay structure, "which will not only improve services for residents but also bring pay inequality at the council to an end".

The Commissioners also praised some governance improvements, including the implementation of many of the actions and recommendations of the Centre for Governance and Scrutiny's (CfGS's) Independent Review of Governance Report 2023.

However, "substantial risks" relating to finances, governance, performance management, service improvement and a waste dispute "threaten to destabilise this progress", the report added.

On governance, the report said: "The council remains deeply wedded to old ways of working.

"The diagnosis that root and branch improvement in governance and culture is needed – particularly in the quality of option appraisals and committee reports and the subsequent timely implementation of decisions – is now, largely, accepted.

"Such improvement is crucial if progress is to be embedded and sustained."

The report also criticised the council's budget-setting process as having "not been with sufficient urgency" and being "characterised by a repeated failure to meet key budget milestones".

The Commissioners meanwhile highlighted tensions between the council and trade union Unite that has seen waste workers refuse to collect bins in recent weeks.

Unite claims that waste workers in the city are facing effective pay cuts of up to £8,000 due to the proposed removal of a role in the staffing structure.

The local authority has been unable to send vehicles out to collect waste from residents due to pickets outside of depots, according to the council.

The council declared a "major incident" on Monday  (31 March), after reporting that 17,000 tonnes of waste remained uncollected across the city.

The Commissioners' report, delivered in January, had noted that the Commissioners were "working in partnership with the council to promote a resolution to this dispute which is essential for service transformation".

Elsewhere in the report, the Commissioners raised concerns about the council's "lack of grip on the many companies, charitable entities and traded services arrangements".

It said the potential risks had been recognised from the outset of the intervention, "but there has been no progress whatsoever in documenting the current position and producing and implementing an action plan over a sensible period to bring good order to governance and operations".

The report also said that the council had been "extremely slow" in identifying or understanding the entities and introducing appropriate governance and control where needed.

The Commissioners reported that the council has now decided to relaunch activity in this area, commencing with a fact-finding stage, but called on the council to renew their efforts at pace.

In their conclusion, the Commissioners said: “There are other major challenges ahead. Historically, BCC has rarely been able to deliver desired outcomes when faced with opposition, even if that opposition is ill-founded.

"The next 12 months will test the council very hard in this area despite knowing that the current level of service is unacceptable to residents or far behind what other councils have delivered by way of transformation."

If the council is able to "weather these storms, the next period should see significant progress along the road to exiting intervention", the Commissioners added.

Responding to the report, Cllr John Cotton, leader of Birmingham City Council, said: "I am clear that there can be no let-up in the hard work that is being done across the council to stabilise our finances and improve the services that our residents receive.

"We now have a new top team in place, led by our exceptional Managing Director Joanne Roney, who are getting to grips with the challenges that we face and are turning this organisation around."

Adam Carey