Babak Belurs: Birmingham Commonwealth Games was a mistake - ex-advisor

Sophie Madden and Caroline Gall

BBC West Midlands

A former advisor to Birmingham City Council has said the hosting of the Commonwealth Games was a mistake given its legacy of financial problems.

Max Caller said last summer's event had been a "challenge too far" for a council beset with difficulties.

The authority is to stop all but essential spending amid an outstanding £760m bill to settle equal pay claims.

Urgent talks are taking place following Tuesday's announcement that the Labour-run council was effectively bankrupt.

The local authority has an £87m hole in its budget this year and might have to spend up to £100m to fix a botched IT system.

Mr Caller is a former non-executive director of the council and was appointed in 2019 to try and help it deal with historical financial problems.

He told the Today programme the Commonwealth Games, which was awarded to the city in December 2017, had diverted the authority's focus away from finding solutions.

'Doing the basics'

"The problem with councils that are in trouble is they just need to focus on getting better, rather than trying to do nice new things," he said.

"There is a limit to the amount of political and managerial capacity and if you're spending time doing Commonwealth Games you cannot cope with the serious problems that you already face.

"The advice that I gave, and that others gave, to officers and members at the time was that this was likely to be a challenge too far."

"If it were me, I wouldn't have done it."

He said while the games had been an "amazing event", it had moved effort away from addressing "the underlying problems that had been around since before 2015" and the council's focus should have been on "doing the basics".

He added: "You can't do nice things if you haven't done the boring really well."

Birmingham during the Commonwealth Games

As news of the desperate situation unfolded on Tuesday, taxpayers demanded to know which services could be at risk, with fears over road maintenance, libraries and cultural projects.

Pat Hollingshead runs a charity in Druids Heath which receives funding from the city council and fears for its future.

"I think it is going to have an impact on everybody but my concern is that I run a community centre and we do a food bank, we do lunch club, we do warm space," she said.

"Since the pandemic we have now got the older generation back in the hall for the lunch club but if anything happens to the building it will just put them all back in isolation.

"[Spending cuts] will have a big impact on Druids Heath because we were supposed to be having a regeneration as well.

"I just don't know what will happen."

Eli Holland, manager of Birmingham foodbank, has concerns about a reduction in the support available for people who are struggling financially.

While his service does not receive funding from the council, he said cuts to support services "would have a massive detrimental impact" on many of those he helps.

"We are hopeful that the council's commitment to continue funding core services will include providing for those around our city who are experiencing poverty."

Council leader John Cotton told the BBC "tough decisions" would need to be made but statutory services like social care, waste collections and protecting the vulnerable would continue.

However, the viability of large-scale events, such as the annual German Christmas Market, will now be under severe scrutiny.

The council's funding of the 2026 European Athletics Championships at the city's Alexander Stadium is also unclear.

Meanwhile, talks are continuing to safeguard the thousands of jobs at the authority.

Sharon Graham, general secretary of the Unite union - which represents hundreds of workers, said: "Birmingham City Council's workers must not pay the price for the council's or central government's incompetence and financial mismanagement.

"Our members undertake vital frontline services that are essential for the communities they serve and they should not be impacted through no fault of their own."

Thurrock Council in Essex declared itself bankrupt in December and the leader of its Labour opposition, John Kent, warned people in Birmingham they were likely to see noticeable changes in the city - and quickly.

"We've seen dirtier streets, grass being cut less frequently, our only theatre is now under threat and every subsidised bus route in the borough was just cancelled," he told BBC WM.

He also said council tax in Thurrock rose by 10% last year and was likely to increase by the same again this year.

"That's the situation we will be in for many years to come. People are rightly very, very angry."

On Tuesday evening, the government revealed it had been "engaging regularly" with the council in recent months "over the pressures it faces, including around its equal pay liability, and have expressed serious concern over its governance arrangements".

"We have requested written assurances from the leader of the council that any decision regarding the council's issues over equal pay represents the best value for taxpayers' money," a spokesperson for Levelling Up, Housing and Communities said.

More than 10,000 council employees were asked last month if they wanted to leave as the authority launched a voluntary severance scheme to help tackle the equal pay claim, which is rising by between £5m to £14m a month.

The council declared a Section 114 notice which means it can no longer balance its budget and cannot commit to any new spending.

But all local authorities have a list of statutory services they must provide, these include education, children's safeguarding and social care, adult social care, waste collection, planning and housing services, road maintenance and library services.

Councillor Meirion Jenkins, shadow Conservative cabinet member for finances, criticised the council for "chronic ineptitude, financial mismanagement, lack of attention to detail".

He added: "In terms of how it is going to affect people, it is going to be terrible.

"Every service that is not statutory in terms of the law... will be cut back or removed entirely and that is going to affect many of the services we expect the council to deliver."

Labour leader Sir Keir Starmer was asked whether he would consider a bailout for Birmingham if he was in power.

He told BBC Breakfast: "If you take a step back from Birmingham, you'll see there are versions of this across the country and that is because for 13 years local authorities have been stripped of the funding they need.

"So we will have to look at that again."

"Frankly, this is a version of a question which is being to put to me every day which is, how on earth is an incoming Labour government, if we are privileged to come into power, going to fix the complete mess everywhere across the country," he added.

"There are things we can do but I think this is the latest example, we've seen councils across the country struggling, of all political persuasions because of the underfunding over many, many years."

Jonathan Carr-West, chief executive of the Local Government Information Unit, added that Birmingham City Council's declaration was a "sobering moment" .

"Questions will no doubt be asked about decision-making and governance in Birmingham," he said

"But questions should also be asked about an inconsistent, fragmented and short-term funding system that is driving dozens of councils across the country to financial ruin.

"Birmingham is the biggest council to fail so far, but unless something changes, it won't be the last."