Birmingham City Council is “improving” – but the Government could still take it over if it fails to make enough progress by January, the authority has been warned.

Local Government Secretary Greg Clark told the Birmingham Post that a report by a government-appointed panel in the new year would reveal whether tougher action is needed.

But he also praised new city council leader John Clancy, saying he was “committed” to bringing much-needed improvements to the authority.

Mr Clark said he met Coun Clancy shortly after the new leader took on the role last month. Also at the meeting was Michael Heseltine, the Conservative peer who advises Mr Clark.

It follows a review of Birmingham City Council last year commissioned by the Government and conducted by Lord Kerslake, which found that the authority was failing to get basic services right.

Ministers gave Birmingham a year to improve and set up the Birmingham Independent Improvement Panel, chaired by business leader and former Chamber of Commerce President John Crabtree, to review progress.

And in November, Mr Crabtree wrote to Mr Clark saying there had been changes but the council was “at an important crossroads” and had more to do.

Speaking to the Post in Westminster, Mr Clark said: “Birmingham is improving. The letter from John Crabtree and his fellow commissioners said that.

“They had been concerned about the political leadership of the council and the pace of change there, but obviously that was before the change of leadership.

“So they are going to write to me again in January to comment about how things are going.

“I think it’s fair to reflect that they did have positive things to say about the administrative improvements in the council, that it was heading in the right direction.

“I certainly am hopeful that John Clancy will do what he’s told me he intends to do, which is to implement the Kerslake recommendations with vigour.”

However, Mr Clark said he still had the option of sending in commissioners to take over the authority, something the Government did in Rotherham earlier this year.

“It is always open to me, if I need to, to send in commissioners. But I haven’t done that.”

Referring to the Birmingham Independent Improvement Panel, he said: “I’ve said that I will be advised by the panel, who are a very expert panel. A very capable panel.”

He pointed out that the panel included Keith Wakefield, former leader of Leeds City Council.

“They know Birmingham and they’ve obviously got experience of running local authorities, including Keith Wakefield who is a former leader of a local authority.

Speaking to the Post “So I take their advice very seriously and I would look to them to make their assessment.”