Senior Birmingham business figure John Crabtree has been named as the head of a panel which could hold the fate of Birmingham City Council in its hands.

Local Government Secretary Eric Pickles announced that Mr Crabtree, a former senior partner of Birmingham law firm Wragge & Co, is to chair a panel to help the council improve after a damning report into the authority's failings last year.

The panel's role will be "to provide independent support to the council" but it is also charged with updating the Secretary of State on progress.

The report, published in December by senior civil servant Sir Bob Kerslake, warned: "There must be demonstrable improvement over the next year or the panel will also need to decide whether further consideration is needed to establish the relative benefits and disbenefits of breaking the authority up."

It follows suggestions that Birmingham City Council's problems are partly a result of it being too large and services could improve if it was broken up into two or more smaller councils.

Mr Crabtree is a former High Sheriff of the West Midlands and former president of the Birmingham Chamber of Commerce and Industry as well as a recipient of the Post's Lifetime Achievement award.

He told the Post: "The job of the panel will be to scrutinise the city council's progress and report on it. But I'm a Brummie born and bred and I am passionate about Birmingham.

"The aim is to be constructive. We won't be going in, as Monty Python would say, like the Spanish Inquisition.

"The council faces a big challenge. It is being asked to do a lot more with fewer resources. Nobody is going to be able to wave a magic wand and make it better overnight."

Mr Crabtree is also chairman of Sense, the charity for children and adults who are deaf-blind, and was made OBE in 2007 for his work with the charity.

Joining him on the panel will be Frances Done, former managing director for Local Government at the Audit Commission and a chartered accountant, and Keith Wakefield, leader of Leeds City Council.

Steve Robinson, chief executive of Cheshire West and Chester Council, will also be a member.

Sir Bob, the Permanent Secretary at the Department of Communities and Local Government, was asked to investigate the problems facing the city council following the Trojan Horse affair, when it emerged an organised group had attempted to introduce a hardline religious ethos into secular state schools.

Ministers were also concerned about the council's struggle to improve children's services and to cope with the financial impact of paying compensation under "single status" agreements to female staff who had historically received lower salaries than men for comparable work.

His inquiry concluded the council suffered from a series of fundamental problems, including "a blurring of roles between members and officers" and a tendency to see itself as a victim. The authority was told to produce a plan setting out how it would implement Sir Bob's recommendations by March 2015, and the independent improvement panel will provide its assessment of the plan to the Secretary of State.

Another report will be produced by the council in December 2015 to report on how it has improved – and in what could be a key moment for the authority, the improvement panel will provide their own assessment of the council's progress to the Secretary of State.

Mr Pickles said: "The Kerslake report found a series of deep rooted and serious problems that are stopping both the city and the council from fulfilling their potential.

"It is essential now that the city council makes rapid progress if it is to serve the people and businesses of Birmingham as it should. I am confident the panel I have appointed will help achieve this."

Sir Albert Bore, leader of the city council, said: "We have now had time to reflect on the report and begun to take steps to address the issues identified.

"We are producing a comprehensive improvement plan, working across the political spectrum and with our external partners. Preliminary work is also well under way with the Boundary Commission for England to review the electoral cycle and ward boundaries."