Hard Choices

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By Vanessa Pearce & Rob MayorBBC News, West Midlands

Emergency measures to help run Birmingham City Council during its financial crisis have been announced by the government.

Commissioners are to be appointed to oversee the effectively bankrupt authority.

Levelling Up secretary Michael Gove told The Commons senior leadership figures in Birmingham had " harmed The City ".

A local inquiry is also set to be launched, He Said .

The Council is facing the prospect of a £760m bill to settle equal pay claims.

It has also warned The Bill is increasing by £5m to £14m each month.

" Poor leadership, weak governance, woeful mismanagement of employee relations and ineffective Service Delivery have harmed The City , " said Mr Gove in Parliament.

" I do not take these decisions lightly, but it is imperative in order to protect the interests of The Residents and taxpayers of Birmingham, and to provide ongoing assurance to the whole local government sector. "

The commissioners would " exercise certain functions of The Council " He Said , with The Inquiry set to consider " the more fundamental questions of how Birmingham got to this position".

The City 's Labour leader, John Cotton , had previously said he had met Mr Gove and was having ongoing communication with his department and The Local Government Association as The Authority recognised its challenges and a need for assistance to address them.

But a government source told The Bbc the scale of difficulties was " much worse than thought" and accused The Authority of failing in its basic duties.

The Council is also facing a projected deficit of £87m in this year's budget.

As a result of the inability to balance The Books , it earlier this month announced that all new spending would cease, although services it had a statutory duty to provide - including education, social care and waste collections - would continue.

Two months before the issuing of that Section 114 notice, which formally outlined the constraints, The Council said it had taken the decision to stop spending on all " non-essential" services. What those are have yet to be announced.

An extraordinary general meeting of the full council is due to be held next Monday to discuss a financial recovery plan.

In a chief executive Deborah Cadman said work to address problems " must be urgent, will involve Hard Choices about what we deliver and how we operate and will result in a smaller organisation".

What is a Section 114 notice?

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On Monday, The Council 's chief executive wrote to staff to say The Authority had been in " constant discussion" with the government.

" I will make sure I let you know when there is an update to share, " she added.

The Council is set to formally ask the government for " exceptional financial support" likely to take the form of permission to borrow money to service debt, or sell assets, such as buildings and land, to raise cash to deal with its financial liabilities.

This has led to speculation over

Prof Tony Travers , visiting professor in the London School of Economics' Department of Government, said selling off assets " would not provide money immediately to relieve 'annual' budget pressures".

But He Said the government had in The Past allowed Birmingham to " capitalise" spending earmarked for equal pay, meaning The Council could use The Money from asset sales to cover such liabilities.

Councillor Robert Alden , leader of The Conservative opposition in Birmingham, said residents deserved better and called for more transparency from The Authority over equal pay claims.

The Labour Administration had " failed to get a grip" of the issue, He Said .

" The Problem is The Council hasn't listened; they haven't listened to the opposition, they haven't listened to the officers, they haven't listened to the auditors and they haven't even listened to the trades unions who have all been raising concerns with them because they have put their heads in The Sand instead of Facing Up to The Mess they've made. "

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Source of news: bbc.com