Council tax rise unavoidable, says commissioner

The man in charge of fixing Birmingham City Council’s finances fears a further 10% council tax rise is unavoidable.

Max Caller, lead commissioner appointed by the government to intervene after the authority declared itself effectively bankrupt, said leaders have had to make “painful” decisions.

Mr Caller said 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 that would have pushed required payments even higher.

Mr Caller also said he had faith in the authority’s political leadership to fix the issues it faces.

He stressed that he was there to oversee decision-making rather than make changes directly.

Leaders have yet to discuss whether residents would see the hike in their council tax in the forthcoming budget, but he said he did not see a way the increase could be avoided.

“The current proposals, which have been reported to the council’s cabinet, include that 10%,” he said.

There was no leeway in the council’s finances, as the authority was still struggling to live within its means.

“At this moment, things are not good in terms of prospects for next year’s budget,” Mr Caller explained.

He said he had been impressed by council leader John Cotton and senior politicians, but had less praise for officers.

“I have no doubt in the commitment of John and his people at a political level,” he said. "[But] the council has however, struggled at officer level to deliver at pace.

“My experience of councillor Cotton and his executive team is they’re committed to getting this council back on his feet.”

He said they were taking decisions which were “difficult” and “painful”, including whether to sell city assets.

He added most authorities would not keep assets that were providing less than an 8% return, and that these were costing more to keep hold of than they were bringing in financially.

Mr Caller said leaders were “still doing the very painful stuff” and was still yet to get to grips with procurement savings to keep services in being.

Speaking about a recent row about commissioners exercising their powers over a proposal to close four day centres, he said delaying a decision was costing about £100,000 per month.

He added that the council was able to scrutinise the proposal, and that commissioners “very, very rarely” exercised their powers to block a call-in.

“If there had been no scrutiny, that would have been different,” he said.

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