Hope for Brummies as Angela Rayner makes fixing Birmingham’s budget crisis a priority

Hopes are rising at Birmingham City Council today that the Labor government will come up with a “bailout” that could still stave off the worst effects of a catastrophic financial crisis that has put every service under huge pressure.

New deputy premier Angela Rayner has made the city’s crisis one of the first issues on her plate after being handed responsibility for local government, we can reveal – with talks already underway between her team and city leader John Cotton and deputy leader. Sharon Thompson.

She has already held discussions directly with council leadership and commissioners ahead of the election to learn more about the situation locally, we understand. Talks are also imminent between party officials in the new Department for Housing, Local Government and Communities and council commissioners, led by Max Caller, who were appointed by Rayner’s predecessor Michael Gove.

READ MORE: Ten things the Prime Minister must do for Birmingham

The news offers potential relief to a beleaguered city facing more than £350m of cuts to services over the next two years – around £149m this year and a further £195m next year. The council has already received exceptional permission from the previous government to sell up to £1 billion in land, property and shares to fund an equal pay deal, redundancies and cover funding shortfalls and has been allowed to raise tax on council by 9.99% per annum for the next two years.

Every area of ​​city life is affected by the crisis – from arts and culture to road maintenance, lawn mowing to street lights, day care centers to libraries. In a briefing to the council’s cabinet next week (Tuesday, July 23), finance director Fiona Greenway warns that the cuts and savings needed for next year are further increased by unbudgeted costs already this year, particularly in children’s services. Demand is increasing and costs are rising in all areas of child care and safeguarding – with more referrals, more children in care, higher costs of residential provision and an increasing number of asylum seekers for unaccompanied children.

More details are also emerging about ongoing problems with Oracle’s worrisome IT system, which will cost millions to fix – £20m this year and £25m next year – and we previously reported on delays in the job evaluation process the board is considering. depending on to avoid claims of more equal pay.

Cllr Cotton plans to tell Cabinet next week that he is committed to tackling the serious challenges facing the council. He will say that under his leadership the challenges facing the city have been recognized and overcome through an open and transparent process. “There will be no denying the magnitude of our task under my leadership, but acknowledging the challenges is NOT the same as accepting defeat. Officers and members alike are working around the clock to meet challenges and mitigate potential risks.”

He will point out the previous government’s failures in the NHS and in tackling the housing crisis had a massive effect in councils such as Birmingham. “Birmingham are not alone in facing these pressures … Birmingham must take responsibility for the unique failings that have contributed to our situation, but those mistakes did not occur in a vacuum.”

And, perhaps alluding to ongoing talks, he added: “I’m confident we now have a Labor government that understands, appreciates and wants to work more closely with councils to deal with communities across the country.”

The incoming government has promised local councils it will quickly deliver multi-year financial settlements to end uncertainty over what funds they will receive from year to year – for the past six years, solutions have only been agreed annually.

A spokesman for the Minister for Housing, Communities and Local Government said today: “We will get local government back on its feet by doing the basics right, and we will start by giving councils more stability through multi-year funding deals. We are rebuilding the relationship with local government and one of the first meetings of the ministerial team was with the leader and deputy leader of the Council. They will also meet with commissioners in the coming days.”

The commissioners presented a six-month report on their findings to Rayner’s predecessor, Michael Gove, in May for the period up to March 31. Its publication has since been delayed, with Rayner likely to scrutinize the report’s findings before releasing it along with her response.

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Chief Commissioner Max Caller, speaking to BirminghamLive this week, said it was clear to him that the council needed to focus on completing the task of balancing the books rather than putting anything off. While he did not comment on speculation that a future Labor government could tone down the Birmingham approach – either by bringing in a new commissioner with a different, longer-term strategy or a significant bailout – he said he did not believe there is a ‘white knight’ on the road to ‘saving the city’. “It’s in the hands of councilors to save the city. There is a future for the city, but getting there will require hard work and tough decisions. In my experience, if you spend more , things get worse, drive away the pain.”

We understand that Government ministers will outline their position on Birmingham City Council’s intervention and the commissioners’ findings shortly.