What future crisis-hit Birmingham council budgets could look like amid hopes of recovery

Birmingham residents have been given a glimmer of hope as the city council has revealed it wants to move away from service cuts in future budgets. After effectively declaring bankruptcy, the crisis-hit council approved a budget that included a huge wave of cuts earlier this year – sending shockwaves across the city.

Libraries, cultural grants, rubbish collections, home-to-school transport, graffiti removal, youth services, motorway maintenance and more have all been hit by Labor council cuts and ‘overhauls’. But a new report published ahead of a cabinet meeting suggested that the short time frame in which the budget was set limited both the “commitment and creativity” that could have gone into the process.

Council leader John Cotton said lessons had been learned, while councilor Rob Pocock admitted there was a need to “hurry up” to set the 2024/25 budget. Looking at next year’s budget, Coun Cotton said: “We intend to focus savings towards improving efficiency and transforming services, rather than just cuts and service cuts.”

READ MORE: Vulnerable older teenagers to bear Birmingham City Council cuts as parents say: ‘Pay more’

These will be driven by “deep issues” and engagement with staff, partners and unions to develop rescue ideas over the coming months, he said. “There remain significant financial challenges for the council, highlighted by the £143.7m budget gap for 2025/26,” Coun Cotton continued.

“Savings of £76.3m for 2025/26 were put forward during the current year’s budgeting process, so full proposals for these savings need to be developed, along with accelerated work on the remaining £67.4m pounds. Clearly, there is a lot of hard work to be done, but we are taking the first steps on the road back to financial recovery.”

The report, by chief financial officer Fiona Greenway, adds: “The majority of savings proposals for 2024/25 were related to service cuts rather than efficiency and transformation of service delivery. For years to come, savings must focus on service transformation, cross-cutting savings and delivering a leaner organisation.”

“Council needs to transform”

Government commissioners, who were sent in by Leveling Up Secretary Michael Gove to oversee the council’s path to recovery, told the council it should aim for 80% of savings to be generated by “efficiency”. “To achieve this level of efficiency, all aspects of the current budget must be reviewed and all parts of the council must be encouraged to transform and adopt new ways of working,” they said.

Councilor Roger Harmer, leader of the Liberal Democrat group on the council, backed the commissioners’ target but hoped they would be real efficiencies – rather than “disguised cuts or inadequate centralisation”. to all the problems that this council got into.”

Conservative group leader Coun Robert Alden added: “The reality is that if this is going to happen in next year’s budget, the work needs to start now. It’s too late to get to February next year and then say we want to make efficiencies.

“In recent years, all the opposition groups have put forward ideas that would allow the council to be able to protect frontline services.”

In response, Coun Cotton said the point about wanting real efficiencies and transforming services was “well made” and that they “generally agree” with where the council needs to be. On the work that must now begin, he continued: “We will certainly look at all the ideas that have come forward, including those from members of the opposition.”

The council’s financial plight is due to problems specific to Birmingham, such as an equal pay fiasco and the disastrous implementation of a new IT and finance system, as well as rising demand for services and funding cuts. Coun Cotton has previously criticized the Conservative government and claimed councils across the country faced a perfect storm of smaller budgets and higher costs.

Tory politicians pointed the finger at mistakes made by the Labor council administration, with Prime Minister Rishi Sunak insisting the authority had mismanaged its finances.

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