Local Conservatives have accused the Labour party of ‘cowardice’ for not holding a full inquiry into the council’s de facto bankruptcy
Cllr Ewan Mackey who says u-turn on public inquiry amounts to ‘cowardice’
Birmingham’s Labour council leader John Cotton has been accused of ‘cowardice’ for U-turning on his pledge to hold a public inquiry into the council’s financial collapse.
Hopes of a full public airing of the background to the city’s financial crisis have been dashed at local and national levels amid claims existing inquiries by the city’s auditors will suffice.
It appears to mark a major U-turn after Coun Cotton previously promised a judge-led inquiry into council affairs.
READ MORE: Public inquiry decision into Birmingham City Council collapse
The about-turn was condemned as ‘cowardice’ by local Tories pressing for an inquiry to ensure key characters answer for their actions.
The failings, leading to financial distress and the declaration of de-facto bankruptcy in 2023, included the equal pay saga due to council-sanctioned discrimination against women workers.
Also implicated was the botched implementation of the council’s Oracle IT system that has overspent by £90m, the scandalous waste of public money behind the loss-making Perry Barr housing scheme and the ‘toxic’ and dysfunctional relations inside the council and between officers and councillors.
A judge-led inquiry was promised first by council leader John Cotton, then by Conservative Secretary of State Michael Gove, as the only way to properly drill down into what exactly went wrong and who was accountable in a quasi-legal setting. Now, nearly two years after the crisis was first flagged, Mr Gove’s successor Angela Rayner has ruled that out.
Given the enormous cost of failure and the impact on ordinary Brummies, BirminghamLive has consistently backed calls for a full inquiry.
Coun Cotton, responding to our inquiries, said: “Since I became leader of the council in May 2023 we have certainly not shied away from scrutiny and there has been a series of detailed and critical, hard hitting reports into issues that led to the Section 114 notices. (These are the legal notices that flagged the council’s financial crisis)
“Consequently, given how much information is now in the public domain, and the reports of the auditor, it is questionable whether the significant costs associated with a public inquiry would represent a good use of resources.
“My priorities at the moment are to resolve the current waste dispute and to continue the progress with the council’s recovery that has been recognised by both Government and the Commissioners.”
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A public inquiry would be the only way that key characters involved in the multiple failings could be compelled to give evidence, and to do so under oath, according to auditors. Inquiries held to date have not investigated if anyone breached any laws or regulations.
The impact of failure has been catastrophic and wide-reaching. The city council has had to embark on a scathing series of cuts to services running to more than £350 million, is having to flog up to a billion pounds of assets and has hiked council tax by a total of more than 17.5 per cent over two years. Hundreds of jobs have also been axed.
So far the only investigations have either been kept under wraps because of ‘commercial sensitivity’ or to protect individual identities, have deliberately avoided assigning specific blame, and have largely been conducted by the council’s own external auditors, Grant Thornton, whose ‘watchdog’ role in the council’s demise has itself been subject to questions.
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Grant Thornton, the council’s appointed external auditors, has been auditing the council’s financial affairs for several years.
It has carried out three ‘value for money’ inquiries under the National Audit Office’s Code of Practice over the last two years.
A spokesperson said: “It is our decision as auditor about the level and detail of the work we do on, although we do engage with the council on the work we are planning and keep them appraised of the costs.”
Its three specific inquiries for the city council so far looked into:
- Financial sustainability – its findings have been published
- The Oracle ‘Enterprise Resource Planning’ system – its findings have been published as a Report Of Public Interest
- Equal Pay – a report has been drafted into the background to the equal pay claims and its outcomes, and its findings are due to be reported soon.
There might yet be a further report into the Perry Barr housing scheme that has ended up £150 million in the red.
Asked whether Grant Thornton backed a public inquiry, a spokesperson said: “It is clearly a matter for the Government as to whether it wishes to launch an inquiry and we have no locus in this matter.
“We would cooperate in full with any inquiry. We hope that our reporting will cover the areas an inquiry might want to look at, but we cannot guarantee this and note that an inquiry would have significantly greater powers to require others to communicate with it.”
We have contacted the Department for Housing, Local Government and Communities to comment.