How has the UK government responded to financial, service, and corporate failings in local authorities

Seminar summary

On 5th September 2023 Birmingham City Council, the largest local authority in the UK, issued a Section 114 notice under the Local Government Finance Act 1988 that indicated the council’s forecast income was insufficient to meet its forecast expenditure in the next financial year. This was widely reported in the national and local media as Birmingham declaring itself ‘bankrupt’ although local authorities, by statute in the UK cannot go bankrupt. On 19th September, Michael Gove the Secretary of State announced the government’s intention to intervene in Birmingham City Council through the appointment of external commissioners. Birmingham CC is, one of a wave of government interventions since the former Northamptonshire County Council issued two Section 114 notices in 2018.

This paper will look at the various forms of central government monitoring and intervention in local authorities in England and the antecedents to the Birmingham case. The research adopts an exploratory approach, primarily based upon official secondary documentation and archival sources. It draws upon government legislation, ministerial statements, parliamentary committee, audit, inspection, and other publicly available reports to identify the key issues and the changing nature of government monitoring and intervention in local authorities.

It will look at the historical development of monitoring and intervention since the Best Value regime and the current intervention powers were introduced. It will describe the various forms of monitoring and interventions in terms of the relationship established between the government and the local authority and the nature and scope of the issues involved. Interventions have been focussed on service, corporate, or financial inadequacies or a combination of all three, although the latest ‘wave’ of interventions have overwhelmingly focused on financial distress. The paper will argue that the current levels of financial distress are unsustainable, and the consequences of the current approach unacceptable. It calls for comprehensive and systemic changes in local government finance arrangements and the nature and form of central government engagement with local authorities.

How to attend this seminar

This seminar will take place on Wednesday 29 May 2024 at 2pm.

It is free to attend with no need to register in advance and we welcome you to join us online.

Speaker bio

Professor Peter Murphy

Peter Murphy is the Director of the Public Policy and Management Research Group within the Centre for Economics, Policy and Public Management at Nottingham Business School, and Professor of Public Policy and Management. Peter is the Head of Research at Nottingham Business School and Director of the Public Policy and Management Research Group, which is a research group within the Centre for Economics, Policy and Public Management (CEPPM). His research focuses on public policy, and in particular the performance management, governance, scrutiny, public assurance, and value-for-money arrangements of locally delivered public services. Peter specialises in practically based and applied research. He is particularly interested in interdisciplinary research, and has attracted financial support from research consultancies and professional institutions as well traditional grant-awarding bodies. Most recently, he has been involved in producing a series of reports and presentations for the National Audit Office, the National Fire Chiefs Council, the Fire Sector Federation and the Centre for Public Scrutiny.