SPECIAL REPORT

Birmingham’s Budget Vote: Legal Advice or Political Leverage?

Councillors at Birmingham City Council have been warned that if they fail to pass a budget by 11 March they could face personal financial liability.

Not political consequences.

Not reputational fallout.

Personal liability.

In my day we called the Monitoring Officer the City Solicitor. We all understood what that meant. The most senior legal officer in the building. The guardian of legality. The person whose words carried institutional weight.

So when the City Solicitor writes to councillors, in the strongest possible terms, raising the possibility that they could be sued for losses if a budget is not set, that is not background noise. Whatever the intention, it will be read by many as pressure.

Whether intended or not, it has the character of a warning, and it will be received as such.

The political backdrop

The budget meeting was adjourned because the administration feared it did not have the numbers. The arithmetic was uncertain. The leadership needs this budget through.

Then the letter arrives.

It rehearses the statutory duty under the Local Government Finance Act 1992 to set council tax and the budget by 11 March. That is correct. It refers to possible Section 5 and Section 114 reports. Also orthodox. Judicial review is mentioned. Fair enough.

Then it moves into more contentious territory.

The email raises the possibility that councillors themselves could be personally liable for losses if a lawful budget is not set. It invokes Westminster City Council v Porter (No 2) and Porter v Magill, cases arising out of the notorious “homes for votes” scandal in Westminster.

That case concerned deliberate manipulation of council housing policy for electoral advantage.

It did not concern councillors voting against a budget because they disagreed with it.

Yet councillors are told that “wilful misconduct” could potentially include failing to vote for their own amendment if the consequence is that a lawful budget cannot be set.

Pause there.

That is not merely explaining the corporate legal position of the authority. The effect is to raise the prospect of personal exposure for the way an elected member votes.

A small historical aside

Porter v Magill was very much of its time. In Birmingham, the Labour Group Leader then was Cllr Sir Dick Knowles, who used to refer to Shirley Porter as “Lady Tesco”, a pointed nod to her family’s connection to the Tesco supermarket fortune.

The case itself concerned the deliberate manipulation of council housing policy for electoral advantage, the so called “homes for votes” affair.

It became shorthand for misconduct in public office and abuse of power.

It was not shorthand for councillors voting against a budget proposal in good faith.

To place ordinary dissent within the same conceptual frame as that scandal is, at the very least, ambitious.

What the King’s Counsel says

Unite the Union obtained an opinion from Tim Buley KC of Landmark Chambers on precisely this issue.

His analysis is clear. A councillor who votes against a budgetary measure on conscience or policy grounds, even where the foreseeable consequence is that the authority misses the 11 March deadline, is not acting unlawfully. Misfeasance in public office requires the councillor’s own act to be unlawful.

Voting is the very function they are elected to perform.

No unlawfulness in the vote means no misfeasance.

The opinion also rejects negligence and breach of statutory duty as viable routes to personal liability, and makes clear that Porter v Magill does not create some freestanding doctrine allowing councils to sue dissenting members for how they vote.

The legal threshold for personal liability is miles away from ordinary political disagreement.

The constitutional line

Let us be clear.

The Council has a statutory duty to set a budget. Failure to do so has consequences. Officers have reporting obligations. Judicial review is a possibility.

But that is not the same as saying that an individual councillor who votes against the administration’s proposal becomes personally exposed to civil damages.

One is about the corporate legal position of the authority.

The other is about the personal liability of elected representatives for exercising democratic judgment.

The danger is that legal advice starts to function as political leverage, even if that is not the aim.

So what should councillors do?

Councillors now find themselves between two forms of authority.

On one side, the City Solicitor and Monitoring Officer, setting out the statutory duty of the authority and raising the possibility of personal liability.

On the other, an eminent King’s Counsel, whose written opinion concludes that councillors voting on conscience or policy grounds are not acting unlawfully and are not exposed to misfeasance.

This is not a trivial difference.

So what is the responsible course?

First, councillors should seek independent legal advice. If they are members of Unite the Union or another recognised union, they should use that channel. If the Council has already commissioned senior advice, members are entitled to understand precisely what it says and whether it has been considered.

Second, they should read the KC opinion for themselves. Not summaries. Not paraphrases. The actual text.

Third, they should remember what their role is. They are elected representatives, not delegates of the Monitoring Officer. Their duty is to act lawfully, in good faith, and in what they consider to be the public interest.

If they believe a budget is lawful and in the public interest, they should vote for it.

If they believe it is flawed, unsustainable, or contrary to their mandate, they are entitled to vote against it.

What they should not do is allow ambiguity about personal liability to substitute for their own judgment.

Abstention as a tactic avoids the question. Absence avoids responsibility. Neither addresses the constitutional issue.

Councillors are not there to hide. They are there to decide.

Appendix

Extract from Tim Buley KC Opinion, 17 July 2024

Paragraph 55

55. For these reasons, I think that the suggestion that a claim for misfeasance could be made against a councillor, or group of councillors, for misfeasance, solely on the basis of their failure (even repeated failure) to approve a local authority budget ahead of the 11 March deadline, is wrong. The essential reason for that is that a local authority councillor who votes in accordance with their conscience, and with no targeted malice, on any particular proposal, cannot be said to be acting in breach of their legal duty, or without power to vote in that way, even if the foreseeable consequence of that vote (coupled with other past events) is that the LA itself will thereby be placed in breach of its legal duty. That basic point is supplemented by other difficulties to such a claim that I have referred to.

Paragraph 61

61. For the reasons that I have given, I conclude that:
    (i) The better view is that a councillor who votes against a budgetary measure on the basis that they are honestly opposed to it, or on “political” or other policy grounds, even in a context where the foreseeable consequence of that vote (and / or that measure being defeated) is that their LA will be thereby placed in breach of section 30(6) of the 1992 Act, will not be liable even in principle to personal liability for misfeasance in a public office, because they will not themselves be acting “unlawfully”. Further, even if this difficulty could be overcome, there are other, likely insuperable, obstacles to any attempt to impose liability on them for misfeasance, outlined above.
    (ii) There is no prospect of such liability arising on any other basis identified to me, including negligence, breach of statutory duty, or any other basis related to Porter v Magill.