Birmingham residents could be in for more ‘misery’ after ‘shockingly bleak’ council update.

Birmingham residents have been warned they face further misery in the coming years after a “shockingly bleak” update on the city council’s financial crisis. The dire situation has already triggered an unprecedented series of proposed service cuts; a 9.99 per cent council tax rise and consternation among many of the city’s communities.

But in a further blow to Brum, the council’s chief financial officer, Fiona Greenway, warned that the “savings” needed for next year are being increased further. In a briefing for the council’s cabinet meeting today, July 23, it was said that the budget gap for 2025/26 was initially estimated at £143.7m.

In March, the city council (BCC) approved a range of proposed service cuts and changes for both this year and next year, while work is also underway to find additional savings to cover the gap from next year. The report went on to say, however, that “additional pressures of £50.8 million have been notified” since July, partly driven by Birmingham Children’s Trust, which estimates an additional pressure of £34.7 million to support children more vulnerable, with increasingly complex needs.

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Additional estimated inflation added a further £4.1m. “This means that significant work is still needed to identify further savings,” the briefing warns, adding that £74.7m – £79.2m needs to be found to close the 2025/26 budget gap now.

During the cabinet meeting, Cllr Roger Harmer, leader of the council’s Liberal Democrats, reacted to the worrying update saying: “This really is a shockingly grim report that spells much more misery for our residents in the next financial year and beyond than even that forecast when we set the budget in March”. He continued: “We need to get all departments of this council to make realistic, sensible forecasts in line with things that are predictable nationally.

“Otherwise, we will struggle to actually put in the balanced budget that we need for our residents.” Robert Alden, Conservative leader of the council, added that it was “hard to understate how bad the situation is” for both. council and therefore residents.

Cllr Mick Brown, cabinet member for children, young people and families, said Birmingham Children’s Trust was embarking on a major transformation programme. He went on to say that the program seeks to meet demand in a “more cost effective and efficient way”, which he said would deliver the savings the council needs as well as ensuring quality services for residents.

“But I accept there is a long way to go,” he added. Responding to Cllr Harmer’s concerns, Graeme Betts, acting chief executive of the BCC, said council officers were continuing to “sit with the trust of the children” to resolve the issues raised.

“I can assure you we will address them,” he said.

A new government, a new hope?

Despite the £50m bombshell, Cllr Rob Pocock, the cabinet member overseeing the council’s transformation, remained optimistic about the future – but admitted there was still “a lot to do”. He went on to say that the new Labor government, now in power after Keir Starmer’s general election victory earlier this month, could offer some hope in the council’s bleak situation.

“We are finally in a position where we have a government that is prepared to give a long-term funding deal to local government,” he said. “This will greatly improve our ability to confidently forecast the city’s financial position going forward.”

He reiterated that Birmingham City Council needs to fundamentally transform and change the way it operates.

“We’re a long way from relaxing and letting things go,” he said. “There is a heavy program of work underway as we speak to address budget planning for 2025/26 and beyond.”

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Discussing the future of the crisis-hit council, he continued: “Wes Streeting (the government’s new secretary of state for health and social care) has given some good examples of how to bring digital technology and artificial intelligence to a wholesale transformation of the way the NHS it works. We need to take a similar approach.”

Council leader John Cotton said there were “no illusions” when it came to the serious financial problems facing the local authority. “We questioned the power of the forecast,” he continued.

“It’s a reflection of the fact that the pressures that are playing out, not just in this council but elsewhere, continue to be severe.” The city council has been gripped by a perfect storm of problems, including Birmingham-specific ones 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.

Tory politicians such as former Prime Minister Rishi Sunak have previously highlighted the mistakes made by the Labor Council administration. During today’s meeting, Cllr Cotton again pointed the finger at the previous Conservative government, arguing that councils across the country were left to cope with rising demand for services but stretched budgets.

“This city council must take responsibility for the unique failings that contributed to our situation, but those mistakes did not occur in a vacuum,” he said.

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