The Government has said it is continuing to engage with Birmingham City Council amid reports that Michael Gove is set to announce plans to appoint commissioners to take over the day-to-day running of the authority.
Reports have also suggested that the council, which issued a Section 114 notice on 5 September, effectively declaring it was bankrupt, may be forced to sell off assets, including its stake in Birmingham Airport.
The issuing of the notice, because the council will not be able to balance its budget in the next financial year, bans all new spending with the exception of “protecting vulnerable people, statutory services and pre-existing commitments”.
It is believed an announcement could be made by the Government as soon as Tuesday.
In a statement, the Department for Levelling Up, Housing and Communities (DLUHC) said: “We continue to engage regularly with Birmingham City Council, as we have done in recent months, over the pressures it faces, including around its equal pay liability, and have expressed serious concern over its governance arrangements.
“We have requested written assurances from the leader of the council that any decision regarding the council’s issues over equal pay represents the best value for taxpayers’ money.”
National and regional newspaper reports have suggested the flagship Library of Birmingham, the city’s Council House, the nearby Museum and Art Gallery, Aston Hall, and the Sarehole Mill Museum are all at risk of being sold off.
Speaking at the weekend, the leader of the Labour-run council, John Cotton, said he had met Mr Gove to discuss support for the council.
Mr Cotton told the BBC’s Politics Midlands programme: “It is clear we are facing a number of challenges in Birmingham so I would like to start by offering an apology on behalf of Birmingham City Council to the people of the city.
“I am apologising for the impact we know this has on citizens.
“We are having to review all of our council activity and look at where we make our spend, but my priority is that we continue focus on frontline service delivery, the things that matter most to the people of this city.”
The council has been grappling with an equal pay liability which has grown over several years.
It is now estimated to stand at around £1 billion and is increasing by millions of pounds per month.
It is also facing an in-year financial gap in its budget which is currently in the region of £87 million, and is having to spend around £100 million on fixing errors in the implementation of a new IT system.
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