Improvement at Birmingham City Council is ‘fragile, has been slower than anticipated and several areas of significant risk remain’, according to the latest report from commissioners called in by the Government to run the local authority.

The commissioners’ third progress report said the council ‘has begun to move in a positive direction’ and is ‘making progress towards the restoration of sound decision-making’.

However, it warns that while budget planning has improved the local authority ‘remains financially fragile’ and needs to continue being under the control of commissioners.

An overspend due to ‘non-achievement of savings’ and the impact of long running industrial action by refuse workers is also flagged by commissioners.

Elsewhere in their report, concerns are raised by commissioners that progress ‘has been slower than we would have wished’ in developing new operating models to deliver efficiency, as well as in improving IT systems.

Commissioners note progress around equal pay but they warn that the council’s financial liability in this area ‘remains a significant risk’.

They warn that the council ‘is not yet fully functioning as a coherent corporate entity’, with other areas of concern including slow progress in improving procurement and commercial functions.

‘These significant risks and persistent challenges, together with the expected churn of councillors and natural uncertainty of outcome in the impending election, mean that commissioners must continue to provide general and targeted support and oversight,’ they warn.

Local government and homelessness minister Alison McGovern, in a letter to lead commissioner Tony McArdle, said she is ‘encouraged to see progress’ since commissioners’ last report in January this year, but notes the concerns raised.

‘Embedding a strong culture, sound governance, and a central transformation vision and plan is essential. The next report should provide evidence of progress in these areas,’ she said.

Birmingham City Council leader Cllr John Cotton said that the council has strengthened its finances and taken action to improve services, with commissioners’ reporting on improvements in adult social care, children’s services and public health. He added: ‘We are not complacent and recognise there is still much to do before we become a well-run council that delivers good services for the people of the city, but we have turned a corner’.