The 1848 Public Health Act allowed councils to improve conditions if they wished. In Birmingham, the council of the 1840s and 1850s consisted of ratepayers who resisted demands to spend money. The conditions of the town of Birmingham were overall very poor.

All this changed when Joseph Chamberlain became the mayor in 1873. He devised a plan for 'gas and water socialism'; the council would take over gas and water companies and improve their supplies and then utilise the profits to make the city a better place to live. Chamberlain persuaded the council to borrow a sum of £2 million to purchase the gas companies in 1875.

By 1879, the council made £165,000 in profits and was able to spend this on public projects. The death rate in Birmingham dropped from 25.2 per 1000 to 20.7 per 1000 by 1880. While in 1876, the Birmingham Improvement Act was passed allowing the council to clear 40 acres of slums in the centre of the city. These slums were replaced by a shopping centre and various other amenities.