The local government minister has signalled a desire to set a new approach to supporting councils in financial trouble.
In a ministerial update to the House of Commons, Jim McMahon said he wants to “reset relations between central and local government”.
“I am exploring options to reset and reform the system to provide a more supportive approach to stewardship for local councils, establishing partnerships across local government built on mutual respect, genuine collaboration and meaningful engagement,” the minister said.
“In any system with adequate checks and balances there will always be a need for government to work directly with a small number of councils in difficulty, but I am clear that this should be done in a different way that is not punitive and is based on genuine partnership to secure improvements.”
McMahon, who is the minister for local government and English devolution, set out his proposed approach to supporting councils in financial trouble in a ministerial update this morning, which also included updates on the government’s interventions in Birmingham City Council and Slough Borough Council.
The minister said government intervention at Slough – which was set to end in November, will be extended by two further years as the council is not yet meeting its Best Value Duty – which requires councils to be able to show that it has arrangements to secure continuous improvement in how it carries out its work.
Commissioners were sent in to take over some responsibilities in December 2021 after the council issued a Section 114 notice, which is how councils declare bankruptcy.
McMahon said some improvements have been made since the start of the intervention, but there are still a substantial number of areas which require further improvement.
The minister said Birmingham City Council, which issued a S114 notice and had commissioners sent in a year ago, “remains in a challenging place”. McMahon said steps towards financial stability have been taken, and that the commissioners sent in have been “fundamental” to this progress.
He added that he is “keen that the intervention moves as quickly as possible to a model based around a more equal partnership with the council, working in the interests of the people of Birmingham”.