In September 2023, Birmingham City Council, the largest local authority in Europe, found itself unable to balance its budget. It issued a Section 114 notice, used when a council cannot meet its spending commitments from its income, thus effectively declaring itself bankrupt. These notices mean that a council cannot commit to any new spending, other than for essential services required by law.
Birmingham City Council is not alone: other councils that issued Section 114 notices in 2023 included Nottingham City and Woking Borough, with a further one in five council leaders expecting to declare bankruptcy within the next 15 months. It is expected that demand for local government services, particularly adults’ and children’s social care, will continue to increase throughout the 2020s. This means increased financial pressures on local authorities are set to continue, with many others on the verge of effective bankruptcy. Meanwhile, financial support from central government has been steadily reducing over the last ten to 15 years, particularly during the coalition years of 2010 to 2015. The National Audit Office estimated in 2018 that English local authorities’ spending power fell by 29% in real terms between 2010/11 and 2017/18. Using similar methodology, the House of Commons Library estimates that it remains 10% below its 2010/11 level in 2024/25.
Beyond the national picture, however, Birmingham City Council have claimed that their poor financial position came as a result of significant costs to put right an IT system that was not fit for purpose, alongside potential liabilities for equal pay claims. But the £760m equal pay figure has been challenged by some in recent months, including the Audit Reform Lab, who argue that the original figure used is speculative. The report claims that the primary driver of the council’s financial problems is the cost of the disastrous implementation of a new ‘Oracle Cloud Fusion’ IT system, and therefore that the current capitalisation direction should be redrawn and extended to April 2028, capitalising against the costs of the Oracle IT system. One year on from the Section 114 notice, the council's drastic programme of cuts is being thrown into question, with the Save Birmingham campaign asking for an immediate pause to the process.
Following the Section 114 notice, Birmingham City Council was tasked with making savings of £300m over two years. They have been granted ‘capitalisation’ permission from central government, giving the council the ability to sell capital assets and convert the proceeds into revenue funding.
This created concerns that the council would need to undertake an immediate ‘fire sale’ of some of its assets. Many residents feared that vital community facilities would be closed and sold off at scale, including libraries, community centres, and sports facilities.
In response, the local co-operative movement, spearheaded by Co-operatives West Midlands, established the Save Birmingham campaign. The aims of the campaign are to bring together community groups and residents to:
• show the importance of heritage, cultural and community places
• identify and officially register those places for protection; and
• explore community-owned and co-operative solutions for public spaces and services that are fair and sustainable.
The primary goal of the campaign at its inception was to protect community places in Birmingham by utilising existing legislation, such as the Assets of Community Value (ACVs) scheme, which enables any building, land, or community space to be officially registered as an ACV, if deemed beneficial to the social wellbeing or interests of a community, both now and into the future.
Both publicly and privately owned assets can be recognised as ACVs, and the official designation provides some protection to the community asset if the owner wants to sell it: the owner must notify residents about their intention to sell, and must then wait six months before they are able to sell it. Communities have the opportunity to bid for the asset during this period, and can access a range of funding either within their community or from external funds. Although selling to the community group that nominated the site is not guaranteed, it does offer some protection in terms of delaying the sale and allowing options to be explored.
Save Birmingham asked residents to nominate valued and important community places on the interactive map on its website, which was launched in September 2023. Support was immediate, with dozens of nominations flooding in within the first few weeks, for libraries, parks and other open spaces, allotments, community centres, cultural venues, and sporting facilities. This sent a clear message to Birmingham City Council and the commissioners as to the value of these facilities within local neighbourhoods and the importance of keeping them open to continue to serve their communities.
The next step for the campaign was to support community organisations and residents in getting these places officially listed as ACVs with the council. This process involves a nomination by a neighbourhood forum, a not-for-profit group, a parish council, or an unconstituted group with at least 21 local members. Birmingham City Council aims to have made a decision on each asset within eight weeks of its nomination.
Save Birmingham worked with partners including Birmingham Community Matters, as well as the Neighbourhood Development and Support Unit within Birmingham City Council itself, to help local groups complete their nominations. A number of online and in-person information sessions about the process took place, as well as the delivery of one-to-one support for local organisations to get their ACV applications over the line, thus successfully delaying any potential sales.
Two months after launching, in November 2023, the campaign achieved a rare unanimous vote of support from all political parties, opening the door for collaborative working with the council to further its aims. The aim of Save Birmingham is not only to act as a challenging voice holding the city council to account, but also to offer positive solutions to help address the financial threats being faced.
Save Birmingham is led by Co-operatives West Midlands (CWM), the representative body of co-operative enterprise in the region. CWM has a wealth of co-operative development expertise within its membership and has been helping co-operative enterprises to thrive in the region for over a decade.
A range of national partners have also come on board to support the work, including Co-operatives UK, Locality, and the Community Land Trust Network. A network of local partners also sit on the steering board, including Birmingham Community Matters, Birmingham Voluntary Services Council, and Birmingham Open Spaces Forum. This has enabled the campaign to reach grassroots and community-led organisations across the whole city through these existing networks and relationships. Funding has been primarily provided by the local co-operatives and charitable funder Barrow Cadbury Trust.
With such a wide range of expertise and knowledge within the campaign, Save Birmingham is in the ideal position to provide residents with the ability and resources to protect and improve the community spaces and services they care about.
The campaign is approaching its one-year anniversary. It has successfully established itself and raised awareness across the city of the assets that may be at risk, and also the tools available to protect them. Over 1400 supporters have signed up via the website, and over 200 community assets have now been listed. The next phase of work is identifying those assets at immediate risk and taking steps to protect them. In terms of community assets, the campaign aims to assist in transferring these to community ownership, rather than them being sold at auction to private investors, which is what has already happened to some of the existing assets, such as retail units and domestic properties.
However, this all takes time, and in the wake of the Audit Reform Lab’s recent report questioning the calculations made by Birmingham City Council that led to the declaration of a Section 114 notice exactly one year ago, Save Birmingham are calling for a pause to the drastic council cuts, to ensure that communities have the time they need to take on community assets.
The Save Birmingham campaign is about more than demonstrating the value of community assets and getting them officially recognised as ACVs. Because it was born out of the co-operative movement, it also aims to promote community ownership and co-operative solutions for council-owned or run spaces and services.
Community ownership isn’t new to the city council. It has a well-established Community Asset Transfer (CAT) programme which was developed in 2009 and has been used for asset transfers in the city since then. Through this, they developed tools to assess the ‘social value’ and longer-term impact of the asset transfer. The principle is that the social value of the organisation seeking to take over the asset can be offset against the market rent, making this option more accessible to charities and other third sector organisations.
The campaign is now focused on supporting residents to explore CAT, where there is local interest to take on the running or ownership of community places. Agreement has been made with the council to share information on the assets that they will be seeking to dispose of in a phased manner over the coming months. This will give local communities the opportunity to assess their ability to take on an asset, develop business plans, and seek finance where necessary. There are many CATs that have already taken place within the city. This provides a network of supportive allies in the form of those groups that have successfully navigated the process and are now running their own thriving community venues.
Supported by partner organisations, the campaign aims to build the capacity and capability of communities to ensure that every neighbourhood has the opportunity to pursue these options. This is vital for a city like Birmingham, where some of the more affluent areas have a great deal more community capacity and are able to quickly galvanise support around an asset at risk. Arguably, the communities that are most at risk of losing valuable lifelines in terms of the services and provisions provided at local places, such as community centres and libraries, are those within the more deprived wards. Save Birmingham is committed to ensuring that no community gets left behind.
Birmingham City Council was not the first local authority to issue a Section 114 notice, nor is it likely to be the last. However, by working with Save Birmingham, it is able to fundamentally review how its services operate. At this stage, pausing and re-evaluating the necessary cuts will give the city council the time required to ensure meaningful public engagement and partnership working built on co-operative and collaborative approaches, and really embedding co-operative principles and models across its service delivery. We hope that this will provide practical and positive solutions that can be replicated elsewhere. ∞
Kathy is a freelance community development consultant and Campaign Co-ordinator for Save Birmingham. She has extensive experience of co-operative and community-led business development and has worked within the third sector for 15 years.
The Save Birmingham campaign, led by Co-operatives West Midlands, brings together a range of partner organisations to give residents the ability and resources to protect the community spaces and services they care about.
