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02.07.18

‘Time running out’ for Birmingham as council admits to insufficient savings

“Time is running out” for cash-strapped Birmingham City Council (BCC) to make changes to get out of its serious financial position, a report has claimed.

The council – which has been in the public eye following a major U-turn of over 100 council staff’s litigation claims against the authority last week – published its Improvement Stocktake report on Friday outlining the progress it has made since receiving recommendations from the Kerslake Report in December 2014.

The report said the council had not yet “fully aligned its revenue expenditure” with available resources and consequently has been using substantial reserves for the last four years, despite welcoming in an improvement panel last year to sort out this issue.

The local authority has yet to be clear as to which services will be cut, however the report has said Birmingham council will not be resorting to “further use of reserves” to get out of its financial position.

“The last three years have been especially problematic in relation to financial ‘grip’ within BCC,” the stocktake report said. “The level of savings delivered has fallen below the planned level, and other spending pressures have also emerged.

“If the council is to move towards financial stability then it must ensure that it develops robust spending and saving plans. If problems are identified in year, resolutions must be identified from within existing budgets, with use of reserves being the option of last resort.”

The report went on to say that BCC will need to improve the transparency of its reporting and decision-making, as previously the scale and nature of the financial difficulties were “not always apparent” to locals or elected members.

‘We need to see real progress’

Birmingham City Council has said it has installed a significant change in approach, moving to a priority-based budgeting system in an effort to reduce spending on lower-priority areas.

Cllr Ian Ward, who became leader after John Clancy resigned over the widely-reported refuse worker dispute, said the report is a detailed and honest look at where the council is on its improvement journey. “We have taken some positive steps forward, there is still much to do, but crucially we know what needs to be done for the benefit of Birmingham’s residents,” he added.

The Midlands council was marred in controversy last year after union members threatened to go on strike following the authority’s plans to cut 122 refuse collection jobs from the books in an effort to cut costs.

In a letter to communities secretary James Brokenshire, the authority said: “It is clear from the report that the council acknowledges that it has not sufficiently gripped the improvement challenge set by Lord Kerslake and is now, with new political and permanent managerial leadership, committed to do so with vigour.”

The council’s new chief executive, Dawn Baxendale, commented: “We have a real and shared determination to drive through changes in the organisation that mean we deliver improved services for our citizens. This collaborative and transparent approach is the right way forward to build on progress already made.”

John Crabtree, chair of the Independent Improvement Panel, argued the crucial issues raised by Lord Kerslake has not been tackled quickly enough. He revealed that the panel will be monitoring progress with the council at monthly joint meetings alongside the Ministry of Housing, Communities, and Local Government.

“Time is running out and we need to see real progress,” added Crabtree.

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