The Government looks set to appoint commissioners to run Birmingham City Council after big financial problems forced it to halt further spending.
Whitehall has said it is continuing to work with the council after council leaders issued a Section 114 notice, effectively declaring bankruptcy. There are also fears the authority could be forced to sell off assets, including its stake in Birmingham Airport.
It was compelled to issue the notice as it will not be able to balance its budget in the next financial year. The move bans all new spending with the exception of “protecting vulnerable people, statutory services and pre-existing commitments”.
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The council has been grappling with an equal pay liability which has grown to stand at around £1 billion and is increasing by millions of pounds a month.
It is also facing 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 a new IT system.
It is believed an announcement to intervene 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.”
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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.”