Road To Financial Recovery with Cllr John Cotton

Our World Is Local

In this special episode of Our World is Local, Nick Kilby and Heather Jameson travelled to the Leader's Office in the Birmingham City Council chambers to sit down with the Leader of the Council, John Cotton.

In 2023, Birmingham City Council suffered the ignominy of having to issue not one but two section 114 notices. An effective bankruptcy order meaning that a council can no longer meet its financial obligations and needs government assistance. The root of the financial problems at Birmingham City Council is an equal pay claim that has been building up for decades and which will cost the council £760m to settle. An IT contract that ballooned in cost by £80m is also contributing to the pain but would have been manageable without the pay claim.

The council’s leadership team and government-appointed commissioners have spent recent months putting together a budget for 2024/25 and the cabinet agreed on a 21% council tax rise for Birmingham bill payers for the next year. This large rise will be accompanied by some very large cuts to local services, as the council aims to make over £370m in savings over the next two financial years.

Throughout this episode, Cllr Cotton speaks candidly and at great length regarding this financial situation that has gripped Europe's largest local authority, as well as outlining the road to recovery for the city.

The conversation covers everything from Oracle and Equal Pay, to Section 114 notices and the governance and culture issues that have all contributed and coalesced to hamper the cash-strapped council.

The issues that Birmingham have faced are emblematic of a wider problem that faces local government, as Cllr Cotton also provides advice for the sector as he sets his sights firmly on financial and reputational recovery for his city.

Hosted by Cratus Group CEO Nick Kilby and the Editor of The MJ, Heather Jameson, the ‘Our World is Local’ podcast is a space to learn about the key figures in local government, highlighting the tremendous work they do for the communities they serve. You can listen to the previous episodes ⁠here⁠.

You can listen to the previous episodes ⁠⁠on Spotify here⁠ and wherever else you listen to your podcasts.