Background and Context
Birmingham City Council is the largest local authority in Europe, representing over a million residents. Each councillor serves a significant constituency, often in single-member wards, which presents unique challenges in such a diverse and vibrant city. Birmingham is marked by high levels of deprivation, with one in two children living in poverty. It is also one of the youngest cities in the UK. These and other factors mean that effective governance – through strong leadership and accountability arrangements – are key to supporting local people.
In light of emerging governance challenges in 2023, the Council commissioned CfGS to undertake an independent review of governance. While this review was being undertaken, significant further financial and governance challenges became apparent – resulting in the issuance by the Council’s chief finance officer of a s114 notice, the submission by external auditors of a series of statutory recommendations and, ultimately, the decision by the Secretary of State to put in place a Commissioner-led best value intervention of the Council.
The Council’s Cabinet agreed the report and its recommendations at a meeting of Cabinet in December 2023. This also involved the agreement of a Governance Stabilisation Plan, and CfGS was further commissioned – using resources made available from Government via the LGA – to support the implementation of that Plan. This was a process overseen by Government Commissioners.
Challenges
At the start of the Government intervention, and at the time that the Governance Stabilisation Plan was starting to be implemented, the Council was working to manage several immediate, interlocking challenges – all with a governance element to them. These included:
- The failure of the rollout of the Council’s finance system (Oracle) – resulting both in substantial cost overruns but also uncertainty on the Council’s ongoing financial position;
- The identification and management of liability associated with ongoing equal pay issues;
- Challenges associated with the delivery of a substantial in-year (and ongoing) savings plan.
Opportunities
The Governance Stabilisation Plan was quite deliberately framed as relating to stabilisation rather than improvement – the intention was to provide the Council with the short-term support that it needed as it grappled with these immediate challenges, and to lay the groundwork for longer term improvement.
The Plan identified 13 areas for focus, with five or six specific actions for each area. It was implemented over a six-month period.
The Plan was focused not only on changes to structure and systems but to early action to understand and take action on shifts in culture, attitude and behaviour – reflecting a key finding of the governance review that culture was a central weakness.
Outcomes and Impact
Culture at Birmingham City Council is starting to change. Relationships are beginning to normalise, and people are developing a better understanding of their roles and responsibilities. The stage has been set for more fundamental improvement and change.
Language has shifted and improved – for example, calling out offensive language in emails and challenging third parties in their language use. The officer scheme of delegation has been updated. Technical work has been completed on the constitution to ensure that it is legally compliant – plans are in train for a more fundamental redrafting of the Council’s governing documents.
CfGS acknowledges that in talking about “outcomes” from this work, the Council is at the very beginning; substantial ongoing work is needed. Our contribution has been to some small initial steps, but all reflect a need for a consistent, common focus on ensuring that the way that the Council “works” reflects the needs of local people, and the need for the Council, its members and officers to support those people.
Lessons Learned
The process has emphasised to the Council that cultural issues are fundamentally important to governance improvement – the rulebook and the presence of clear systems and processes are important but not the sum total of the story.
At the epicentre is deciding what sort of council do you want to be – as well as building spaces where people can be honest with each other and feel safe to make mistakes. Frankness and candour are critical behaviours that will help to build a more honest organisational culture.
The Council has developed an understanding of the “nuts and bolts” issues that it needs to keep on top of, as many of these things had fallen by the wayside. Keeping the governance framework up to date is one example here.
Finally, the process has given officers and members the opportunity to ensure a continued focus on the people who the council exist to serve.
Future Directions
As a way forward, Birmingham now has a comprehensive improvement recovery plan, which details how the council will become a well-run council that is financially stable with good services. The Governance Stabilisation Plan has fed directly into the development of that wider plan, and future work on governance is now fully integrated with it. The Council is planning wider and deeper work on improvement in this space – taking a planned, prioritised approach only possible because of the initial stabilisation activity.
Message to other councils in a similar situation
Birmingham’s situation and context is unique – but others have felt governance and financial pressures coming together in a “perfect storm”, even if not at the same scale. But some of the overall messages are held in common with others. In particular, there is a need to think about the quality of political and managerial leadership, and the critical relationships that underpin that leadership. There is a need to make sure that leadership (especially on the officer side) is framed directly by an acute understanding of local people, their needs, and the insight that councillors have into those needs. On the councillor side, there is a need to understand the distinction between political and managerial leadership.
CfGS’s support to local government improvement brings with it a contractual requirement to produce case studies of recent improvement activity funded by Government. The content of these case studies has been developed by CfGS and councils’ jointly. They should not be taken as reflecting a formal evaluation of the impact of the work described, but as a way of highlighting and describing to other authorities lessons learned from these projects that might have wider application for the sector.
All case studies