Birmingham headed for multi-million pound overspend

9 Nov 16

Birmingham City Council is set for a £49m overspend in the current financial year and faces “a mammoth task” to balance its 2017-18 budget, the latest report from the improvement panel overseeing the authority’s reform plan has stated.

In a letter to local government secretary Sajid Javid today, the independent panel said that the authority acknowledged that a significant number of its 2016/17 budget reduction proposals were unrealistic. There was also insufficient understanding and ownership of the spending plan and a lack of comprehensive and robust delivery plan for the measures needed to balance the council’s budget.

As a result, the council, which is the largest in England, will have to use the authority’s reserves to meet these additional costs.
This will leave a further £78m of savings required to balance the 2017-18 budget, which the panel said was “a mammoth task… to be achieved over a very short timescale”.

The panel, which was appointed by former local government secretary Sir Eric Pickles to oversee a reform plan after a review by Sir Bob Kerslake found Birmingham was not consistently providing good quality services, said the overspend was serious.

Panel chair John Crabtree said it was concerned about the impact addressing these financial concerns with very limited reserves could have on the council’s improvement.

However, he added that the discussions with council leader John Clancy, cabinet members and chief executive Mark Rogers had demonstrated they are “actively engaged in joint working to understand and grip the full challenge now facing the council” and indentifying the measures needed to bridge the “very substantial financial gap”.

Crabtree said: “Given the need for the council to have absolute confidence in the deliverability of the 2017-18 revenue budget when asked to approve it in March 2017, we have agreed with the council to jointly commission an independent review of the 2017/18 budget. The review will have a particular focus on the quality and robustness of the council’s delivery plans for 2017-18 across all areas of expenditure.”

Responding to the letter, Clancy and Rogers said the panel had recognised the progress that had been made two years into the authority’s five-year improvement programme.

“The panel’s acceptance that the council is actively addressing concerns raised by the Kerslake review and is strengthening how it manages its corporate performance by putting in place improved collaborative working between elected members and officers is also welcomed,” Clancy added.

“I am particularly pleased that the panel is fully supportive of my decision to appoint four assistant council leaders who are leading a drive towards greater devolution and developing new ways of involving and listening to the views of citizens.”

Rogers said that “continuing and profound reductions to local government funding” meant budget setting had become increasingly challenging.

He agreed the 2017-18 budget setting would be a mammoth task, but added it was not one the authority would shy away from.

“We are equally determined to continue the wider work to improve ourselves and will not lose sight of our responsibilities to improve safeguarding and education services,” he added.

“These are the toughest of times ahead, but I have a strong team with me who as are committed as I am about delivering positive change for Birmingham.

“Challenge during these times is always welcome, and helps us to focus even harder on delivering the services and support, with partners, for Birmingham citizens.”

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