'Jaw-droppingly bad' council criticised in report

A "crippling" failed attempt to implement an IT system and "inadequate" housing services were among the problems that plagued a crisis-hit council before it effectively declared itself bankrupt, a "jaw-droppingly bad" report has said.

Auditors Grant Thornton also highlighted Birmingham City Council's failings in services for children and families with special educational needs and disabilities, and "serious mismanagement in the waste and street-scene services", leading to equal pay liabilities.

But it found "appropriate steps" were being taken by the authority to address its financial situation.

Councillors at an audit committee said they were "shocked and "ashamed" by the report's contents.

The council effectively declared itself bankrupt in September 2023, triggering a wave of cuts to services and plans to raise council tax by about 20% over two years.

The audit covered the Labour-run council's finances for the periods 2021-22, 2022-23 and 2023-24.

"Ultimately, the lack of timely information on the severity and implications of the emerging issues has hampered the ability of senior management and members to intervene effectively," the report read.

"This appears to have been made worse by a culture in the organisation of not reporting or being receptive to bad news, an over-emphasis on protecting personal reputations and a lack of challenge and rigour in governance."

Speaking at the audit committee, Conservative councillor Richard Parkin said the report was "jaw-droppingly bad", adding: "How can we have any confidence that anything is going to change given the history of things being ignored?".

"I read [the report] and I feel ashamed," Labour councillor Liz Clements added. "We absolutely need to own the mistakes and do all we can to learn from them in the future."

During the meeting, Labour councillor Karen McCarthy, cabinet member for finance, acknowledged the report didn't make for comfortable reading.

"My mantra since I took this role on in May last year is that we want everything on the table and no hidden corners," she said.

The report concluded the council's financial position was the result of numerous complex matters - including the alleged equal pay liability.

"It is not appropriate to single out or discount any of the matters," it said. "Each has had a significant impact on the council's financial sustainability."

The auditors said they were satisfied the council was addressing the financial situation but added its sustainability would remain a "significant risk over the medium term".

This news was gathered by the Local Democracy Reporting Service which covers councils and other public service organisations.

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