Commissioners appointed to oversee Birmingham city council as debt crisis puts museums in firing line

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UK housing secretary Michael Gove is this week expected to announce the appointment of commissioners to take over the day-to-day running of the Birmingham city council, after it effectively declared itself bankrupt this month. The struggles faced by the council— which funds a number of the city’s leading arts organisations—have left Birmingham’s arts and culture sector in disarray.

On 5 September the council issued a section 114 notice, reluctantly admitting it could not meet its spiralling financial obligations. This includes a new £760m bill relating to equal pay claims dating back to 2012, and a huge blunder with an IT project where initial costs of £20m ballooned to an eye-watering £100m. The council has already paid out £1.1bn in equal pay settlements.

The commissioners appointed by Gove will take over the day-to-day running of the council, with responsibilities to include analysing council accounts and recommending assets to be sold.

Significant and lucrative cultural institutions such as the city’s flagship museum, Birmingham Museum & Art Gallery (BMAG) and 17th-century Jacobean mansion Aston Hall could be sold at a cut price to meet the deficit. The Library of Birmingham, opened to much fanfare just 10 years ago this month, could also be up for sale.

In 2015 the council sold the city’s National Exhibition Centre to a private equity firm for £307m, to help settle a £1.1bn bill for equal pay claims. Just three years later it was sold on by the firm for £800m. Residents are now concerned that its remaining cultural assets could be sold on the cheap in a ‘fire sale’.

A section 114 notice means that BCC, responsible for 1.145 million residents and the largest local authority in the UK and Europe, must cease all non-essential spending with immediate effect.

In a statement published on Tuesday 5 September, a council spokesperson said there was a financial gap within its budget that currently stands at £87.4m, adding that “the council has insufficient resources to meet the equal pay expenditure and currently does not have any other means of meeting this liability.”

A spokesperson also went on to say that “the Council will tighten the spend controls already in place and put them in the hands of the Section 151 Officer to ensure there is complete grip.”

Birmingham City Council partially funds a number of leading arts organisations in the city, including the Birmingham Museums Trust’s (BMT) nine museum sites and contemporary art gallery Ikon. There is a genuine fear in the city that pausing non-essential spending could be catastrophic for the arts.

Speaking to The Art Newspaper, a Birmingham Museums Trust spokesperson confirmed the extent of the council’s involvement in funding, saying: “The Council has a 25-year service level agreement in place with Birmingham Museums Trust until 31 March 2041. As part of this, there is a four-year rolling funding agreement until 31 March 2026.” They added that BMAG is just one of nine museum sites managed by the Trust on behalf of Birmingham City Council. Other prominent sites include Thinktank Birmingham Science Museum and Aston Hall.

“Birmingham City Council and Arts Council England are BMT’s two main funders, and BCC investment equates to approximately 45% of BMT’s total annual funding, which includes an annual grant towards the rent and service charge for Thinktank,” the spokesperson said.

Birmingham’s deepening financial woes come at a time when BMAG remains closed for essential, and somewhat lengthy, building works. Beside its partial re-opening around the 2022 Commonwealth Games, it has been closed since 2020 and is not due to re-open until 2024. A Birmingham Museums Trust spokesman told The Art Newspaper that the essential works should be completed this autumn and that a reopening date will be reviewed accordingly.

This news has rocked a city which hit the headlines for all the right reasons last summer; Birmingham 2022 was the most successful Commonwealth Games in history. Records were broken: more than 1.5 million tickets were sold and coverage generated 57.1 million streams across BBC’s digital platforms.

Its unexpected star was the roaring Raging Bull from the opening ceremony. Residents and councillors fought tooth and nail for the 10-metre mechanical bull to become a permanent installation, and a public vote saw it named Ozzy, after Black Sabbath’s Ozzy Osbourne. It now stands proud inside Birmingham New Street railway station’s concourse.

Birmingham is a city used to setbacks. In 1992 it failed with a bid to host the Olympics, lost out to Londonderry in its 2013 City of Culture attempt, and couldn’t persuade Eurovision bosses earlier this year to let it host the singing contest.

After its record-breaking summer, bullish city chiefs promised a “golden decade” ahead. It all looked rosy when in November 2022, Birmingham was awarded the 2026 European Athletics Championships. That, along with all other public spending, is now under scrutiny.

In March 2023 the council released a report revealing almost £9m set aside to support arts and culture in Birmingham, with grants totalling £2,975,451 per annum to be released over the next three financial years.

When the report was announced, Cllr Jayne Francis, Cabinet Member for Digital, Culture, Heritage and Tourism said it was important that cultural activities remain accessible and relevant for all, adding: “this is a golden decade of opportunity for the city, and we are enabling Birmingham’s world-class arts sector to capitalise on that, by putting the talent in our city on a national and global stage.”

It is unclear at this stage whether this funding remains ringfenced for smaller organisations such as Sampad—South Asian Arts Heritage, dedicated to arts and culture from the region—Birmingham Royal Ballet and Ikon Gallery, listed in the report. Both Birmingham Museums Trust and Ikon were unable to comment specifically about the Council’s future arts funding.

Smaller organisations such as Ikon gallery have been unable to confirm if their funding will be protected

Photo: Nick Maslen / Alamy Stock Photo

Speaking to The Art Newspaper, Ikon chief executive officer Ian Hyde said: “Ikon receives a small amount of funding annually from Birmingham City Council, which is on a four-year agreement until 2026.”

“It’s too early to know what the impact will be on the arts and cultural sector within the city, and we continue to communicate with the city council and our colleagues across the sector during this time.”

Birmingham City Council representatives were unavailable at the time of writing. Other leading city arts organisations and figures were contacted by The Art Newspaper but declined to comment.

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