No fire sale of assets at 'bankrupt' Birmingham City Council, says leader

"Everything is on the table" - Birmingham council leader John Cotton tells BBC Radio WM listeners he does not know what will be sold yet

The leader of troubled Birmingham City Council says there will not be a fire sale of assets, despite the authority facing a £200m deficit.

Equal pay claims of up to £760m and an £80m overspend on an IT system led to the authority effectively declaring itself bankrupt in September.

Its Labour leader John Cotton told BBC Radio WM "everything was on the table", as it looked at its budget and savings.

A draft budget was being drawn up to be discussed from 12 December, he said.

"Given that we've got the situation that we face, we have to look at everything that's within the council's budget," he said.

"But that's not to say we're bringing a sort of fire sale of assets or we're going to be disposing of serious things that matter to the people of this city.

"We need to do this in a grown up and sustained way, working with the commissioners."

Earlier this month, a council review revealed it faces a £165m budget deficit in the next financial year, and a need to find savings of £35m the year after.

It also needs to use its reserves to meet this year's deficit of £87m.

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After its financial crisis was revealed the government sent in commissioners to help run the authority.

The move came after Levelling Up Secretary Michael Gove accused the authority of "poor leadership, weak governance, woeful mismanagement of employee relations and ineffective service delivery", during a debate in Parliament.

Since then Mr Cotton said the council has been working with the cabinet, senior leaders and the commissioners to see where and how savings can be made.

The draft budget will set out "the headlines" of the steps that need to be taken and will not be agreed until the end of February following a public consultation, he said.

A new budget will not be agreed until February, Mr Cotton said

"We do know taking £200m out of the budget over the next two years is going to be very difficult. It's going to involve some very stark choices," Mr Cotton told presenter Kathryn Stancyzszyn.

Decisions would also be made around "how the council does its business", which include ending any duplication and potential merger or bringing together of services.

Commissioners have said there must be a decision on disposal of assets "this calendar year" and Mr Cotton said a process was already under way.

He said some of this was already being dealt with, and that work was now being accelerated.

He would not be drawn on whether Sutton Park was one site that could potentially be sold, saying city parks and green spaces were important to Birmingham residents.

Judge-led inquiry

In July, the authority took the decision to stop non-essential spending.

Explaining how the council found itself in such financial difficulty, Mr Cotton said that in the early part of the year the authority set aside over £270m to meet the equal pay liability.

But it became clear when he then took over as leader in May and asked for a full review, that a much greater overspend on the new IT system was revealed.

"The clarification from officers and the official figures were put in front of me after I became leader, after I ordered that further look at council finances," he said.

Not knowing about such a shortfall prompted him to ask for a judge-led inquiry "to discover exactly what's happened", he said.

He said there were issues around governance within the council and he had ordered a review into that area and he now agreed with the government that a locally-led inquiry would take place instead as part of the commissioner intervention.