After Birmingham City Council approved a bankruptcy notice and strict spending controls, the co-op movement has launched a campaign to save the city’s community assets from a fire sale.
Co-operatives West Midlands, the local representative body for the co-operative movement, is bringing together a range of partner organisations “to give residents the ability and resources to protect the community spaces and services they care about”.
The campaign follows the financial collapse of the city council, which issued a section 114 notice earlier this month, effectively declaring bankruptcy. It is now expected to receive a revised emergency budget at another meeting next month.
Michael Gove, secretary of state for levelling up, housing and communities, is sending a team of commissioners to run the council, which is expected to involve the sale of assets, job cuts and council tax rises.
The council, which serves more than 1 million people, has a budget shortfall of £87m for the current financial year, set to rise to £165m next year. It faces a £760m bill for equal pay claims, on top of £1bn it has already paid out over the past decade, while problems with a new IT system could cost £100m to fix.
This crisis has put local community spaces and services at risk, prompting the Save Birmingham campaign.
Initially the campaign aims to raise awareness among residents and make connections with voluntary, community and co-operative organisations.
“We then want to provide tools for residents to protect the spaces or services in their community that they care about,” it says. “We hope this will either block or delay potential sales, so Birmingham City Council has to consider community-based solutions.
“Longer term, we want to work with partners to explore and develop co-operative solutions for public spaces and services. This could include potential funding opportunities where residents want to take over the running of their community places.
“This is all with the aim of developing positive and practical solutions for the problems facing Birmingham today and could be a showcase for other areas in the country.”
Organisers want to help residents identify and protect important community places by preventing sales or helping them become community-owned.
This could be done designating a building, venue, park or other council facility as an asset of community value, giving local residents the right to buy when the council considers selling the asset – delaying the sale by around six months. If the community raises enough funds and is successful, this could lead to a community asset transfer where residents take responsibility for owning and running the asset.
“We’re working through the details,” says Save Birmingham, “but we think this process would help to show the strength of feeling that local residents have about council-owned assets in their local community, either preventing a sale in the first place or leading to community ownership.”
It adds: “Longer term, we want to develop community and co-operative solutions for council-owned or run spaces and services, learning from good practice elsewhere in the country to ultimately make things better for Birmingham’s residents and communities.”
Establishing a replicable model is important because Labour-led Birmingham – a member of the Co-operative Councils Innovation Network – is not the only authority to face financial problems. Earlier this year Lib Dem-led Woking declared bankruptcy, blaming debts racked up under the previous Conservative administration.
And in 2020, Croydon – another CCIN member – declared bankruptcy after running into trouble with property investments and overspends on social care. After control switched to the Conservatives it went bust again in 2022.
Labour-run Slough declared bankruptcy in 2021, as did Conservative-run Thurrock in 2022.
England’s local authorities have long warned of the impact of the cuts to central govenment funding under the post-2010 austerity measures. Last year the County Councils Network warned that any further moves to cut their budgets would result in “devastating” reductions to local services.
In August, the Local Government Association warned that 26 councils are estimated to be at risk of bankruptcy in the next two years.
