The UK Housing Secretary, Michael Gove, is expected today (Tuesday 19 August) to appoint commissioners to manage Birmingham City Council (BCC) after the local authority effectively declared itself bankrupt, according to a report in The Times.
It is anticipated the commissioners will oversee the daily management of the council and make recommendations about what assets it can sell to generate funds. Council leaders are due to convene on 25 September to present a financial recovery plan laying out in detail what they will sell.
In 2015, the city sold off the National Exhibition Centre (NEC) to a private equity firm for £307m to help settle a £1.1bn bill stemming from a historic equal pay ruling. That firm sold the NEC three years later for £800m.
In addition, BCC has revealed it is facing a bill of up to £760m in further discrimination claims, along with £100m in costs for a failed IT project.
There is now speculation that cultural institutions across the city, including Birmingham Museum & Art Gallery (BMAG), the 17th century Jacobean mansion Aston Hall and the Library of Birmingham, will be sold at a cut price to meet the current deficit.
Even if they don't end up on the chopping block, there is still concern for the arts organisations that BCC supports, including the Birmingham Museums Trust’s (BMT) nine museum sites and contemporary art gallery Ikon. BCC investment equates to approximately 45% of BMT’s total annual funding.
Last month, Birmingham announced it was facing a budget shortfall of £87.4m for 2023-24, rising to £164.8m for 2024-25. It issued a section 114 notice in which it committed to spend money only to protect vulnerable people and maintain statutory services.
It is the seventh UK council to issue a section 114 notice since 2020, including Croydon and Thurrock, with at least 26 English local authorities thought to be at risk within the next two years.