Max Caller, the UK government’s go-to turnaround man at failing local councils, gave himself the online moniker “dormant volcano” when he hung up his boots last March after 50 years of public service.
But an appeal to him last week from Michael Gove, secretary of state for levelling up, housing and communities, to help rescue Birmingham city council from de facto bankruptcy has fired him up again.
Caller’s record of past interventions suggests that everything at the council, the UK’s largest in terms of population it serves and services it provides, could be vulnerable to sell-offs or cuts.
“You have to balance the books,” said Caller, whose modus operandi has been blunt but non-political and who has recognised that ultimately “you can’t just go on shrinking the budget”.
Earlier this month, Birmingham, the UK’s second city, became the latest in a string of local authorities to issue a section 114 notice, in effect declaring that it was unable to fulfil its statutory obligation to balance the books. It had been tipped into insolvency by an equal pay claim of up to £760mn and IT cost overruns of £75mn.
“You can’t turn down an opportunity to sort out Birmingham,” said Caller, whose long career in local government has included saving the London boroughs of Hackney and Tower Hamlets from gross mismanagement; scrutinising Liverpool in 2020 when police were investigating corruption; and most recently righting Slough after town centre developments loaded the council with debt.
Caller, who started out as a civil engineer doing a feasibility study for the Tideway super sewage pipe in London that is only now being built, has earned a fearsome reputation along the way.
“In part that is because of the way the system works,” he said, adding that by the time he is called “everyone knows you are in trouble”.
Given Birmingham’s size and the role the council has played in the city’s revival, the speed of its recovery is likely to be of greater consequence than it has been at other failed local authorities.
Gove said that, pending consultations, he intended to put the Labour-run authority in “special measures”, replacing elected leaders with government-appointed commissioners while finances are stabilised. Caller, he said, was the man to lead the job.
His selection is seen as both positive and negative in local government circles in Birmingham. They know the medicine Caller prescribes is hard to swallow. They also know it could put the council on the road to recovery.
“We can’t spend forever on the naughty step,” said an official close to John Cotton, the elected council leader whose role will be supplanted. “My understanding is Caller is someone who, once you identify what needs doing, doesn’t mess about.”
Caller, whose position is yet to be officially confirmed, would not be drawn on what might be needed in Birmingham. But his past playbook could be a guide.
First, there will be rigorous scrutiny of spending. “We had to ask permission to put loo roll in staff toilets,” said Luke Akehurst, who was chief whip for the Labour group in Hackney when Caller was brought in as chief executive there in 2000.
Inevitably, there will be painful cuts to all but ringfenced services such as child protection and adult social care. Jobs, donations to the voluntary sector and even the frequency of rubbish collection will be on the line.
The council’s assets, which are considerable in Birmingham despite previous sell-offs, will be leveraged.
“All those things have to be in play,” Caller said. “The only thing you shouldn’t worry about is why you got in a mess. If you spend time looking backwards you are not spending time getting better services for the people.”
Speaking of other ailing councils that have failed to take tough decisions quickly enough, he said that the one thing in short supply is time: “If you don’t get momentum for recovery, improvement doesn’t happen.”
When he took over as chief executive of Hackney 23 years ago, the council was a graveyard for local government careers. There were black holes in the accounts and Labour, the dominant party locally, was at civil war.
Recalling Caller’s first moves, Akehurst, who now serves on Labour’s national executive council, said protesters marched with “Axe mad Max” banners. When his first budget was set police were called in to protect the town hall from arsonists.
Four years later Hackney was commended as one of the most improved councils in the country. By 2010 it was shortlisted as one of the best run. Akehurst said Caller got the politicians to sign up “to unpalatable decisions”, but ultimately left the borough “in high regard”.
After the decade of austerity from 2010 to 2020 when council budgets were eviscerated, Akehurst is worried that it will be less obvious what to cut in Birmingham.
“Whereas in Hackney I knew there were inefficiencies in the back office, my fear would be that this deep into the squeeze on local government spending, all that has been dealt with,” he said.
In Slough, Caller’s most recent intervention as a commissioner, the council has been forced to sell hundreds of millions of pounds’ worth of assets to pay off debts.
The Institute for Public Policy Research think-tank said this week that English councils have sold about £15bn worth of public assets to plug budget shortfalls over the past decade, among them playing fields, youth clubs and libraries.
Determining how far to swing the axe in Birmingham will be a delicate task, said Jonathan Carr-West, chief executive of the Local Government Information Unit think-tank.
Caller’s challenge will “on a different scale to elsewhere”, he said: “A barren 10 years in Slough is bad for Slough. Trigger that in Birmingham and it has a knock-on effect across the Midlands and beyond.”
