DLUHC names full intervention team for Birmingham City Council

Cabinet Office’s crown representative for top tech firms is one of six specialists being parachuted in to help “bankrupt” authority
Birmingham City Council House in Victoria Square, Birmingham. Photo: Rob Carter/Alamy Stock Photo

By Jim Dunton

06 Oct 2023

The Department for Levelling Up, Housing and Communities has named a Cabinet Office crown representative for top technology firms among the six commissioners being dispatched to help Birmingham City Council tackle its latest financial crisis.

Myron Hrycyk is crown rep for Oracle, IBM and Microsoft and has been specifically tasked with helping Birmingham deal with the rocketing cost of its Oracle IT system, which has increased in price from an originally expected £19m to £100m at present. 

Birmingham issued a so-called Section 114 notice at the beginning of last month, stating that it would be unable to balance its books for the year. It cited the expected £760m bill for an equal-pay settlement for staff and the cost of the IT system among the reasons for issuing the notice, which is the local-government equivalent of a declaration of bankruptcy.

Communities secretary Michael Gove subsequently told MPs he was minded to send commissioners in to the city council to sort out its finances. He named municipal turnaround specialist Max Caller as lead commissioner. 

Yesterday, DLUHC said Gove had finalised the five other commissioners who would be supporting Caller and said two political advisers would also be sent to Birmingham to support the council’s elected leadership.

In addition to Hrycyk, the lineup of commissioners includes local government experts Jackie Belton, John Coughlan, Pam Parkes and Chris Tambini. 

Coughlan is a former chief executive of Hampshire County Council and social-services specialist who already serves as a Department for Education-appointed commissioner in Birmingham for children with special educational needs and disabilities. Belton is currently chief executive of the London Borough of Bexley; Parkes is executive director for people and transformation at Essex County Council; and Tambini is a former director of corporate resources at Leicestershire County Council.

Gove’s political advisers are former cabinet minister Lord John Hutton, who held secretary-of-state roles in the governments of both Tony Blair and Gordon Brown, and former elected mayor of the London Borough of Tower Hamlets John Biggs.

Documents supporting the government intervention at Birmingham City Council show that Gove has instructed the authority to pay lead commissioner Caller a day rate of £1,200 for his work at the authority. City leaders have been told to pay the other commissioners a rate of £1,100 a day. They will also be entitled to receive “reasonable expenses” in line with those payable to senior officials at the authority.

A letter sent to city council chief executive Deborah Cadman by DLUHC deputy director for local government stewardship Max Soule on behalf of Gove said Birmingham would have to pay each commissioner and adviser for up to 150 days of work a year. 

The letter said the eight-strong team of commissioners and advisers had a wealth of knowledge and experience in local authority leadership, decision-making, governance, finance, HR, IT and commercial development. 

“The secretary of state recognises the expertise of his appointees and is confident that they will be key to resolving Birmingham City Council’s issues as quickly and effectively as possible,” Soule said.

He also confirmed that the directions made under the Local Government Act 1999 that underpin the intervention would remain in place for five years. 

“That this is a longer duration than in previous interventions reflects the severity and size of the challenge at Birmingham, in comparison to other intervention areas,” he said.

The directions made by Gove yesterday give the commissioners a range of powers including “all functions” associated with the governance and scrutiny of strategic decision making by the authority and also for strategic financial decision-making. 

The directions list a range of areas where commissioners are entitled to advise and “challenge” the authority, such as on preparing and implementing a detailed action plan to achieve financial sustainability. That work includes the production of “a robust multi-year savings plan” and “strictly limiting future borrowing and capital spending”.

Commissioners will also have the power to intervene in all areas that relate to the hiring and firing of designated statutory officers, such as the chief executive, chief financial officer – or Section 151 officer, and the monitoring officer. 

The DLUHC letter said Gove considered that Birmingham City Council should continue to make most decisions itself, but that the directions would allow the commissioners to “uphold proper standards and due process and recommend action”.

“The commissioners should not hesitate to exercise their functions if they determine it to be necessary to do so,” the letter said.

“The exercise of these functions should enable the commissioners to make sure that the authority has made sufficient improvement within the next five years to be able to comply with its best value duty on a sustainable basis.”

The letter added that Gove had requested six-monthly progress reports from the commissioners and had not ruled out the possibility of expanding their powers.

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