Race against the clock: Birmingham given a month to make £300m savings plan

Birmingham City Council have been given their new year’s resolution early as government commissioners have set a deadline of 7^th January for the authority to establish a £300m savings plan over the next two years.

Three months ago Birmingham City Council (BCC) effectively declared themselves as bankrupt as they were the first local authority in England to issue a Section 114 notice amid severe financial struggles caused by the cost-of-living crisis.

Issuing a Section 114 has since been a pattern various local authorities have followed – 15 councils in England are now reported to have do so.

The final straw that led Birmingham to issue the notice was the fact they faced the dual challenge of an equal pay liability of £760m and an £80m overspend on an IT project.

However, on Monday 4^th December, an independent report in the governance at the council outlined what was described as a ‘deep-seated blame culture’ and ‘low levels of trust’ which had worsened its financial crisis.

The report claimed there was no specific root cause of the failures, but researchers did claim that there was a tendency to try to ‘minimise bad news’. Although, in an attempt to address this, the report recommended that the council prioritise services to residents and try to change the behaviour of councillors and officers.

Discussed by cabinet on 12^th December, the report lists five causes for concern as the local authority remains under financial strain. The first of the five bullet points, which were first reported by the BBC, simply reads: ‘The BCC financial position remains extremely serious challenging’.

Finance director Fiona Greenway, has, however, produced her own report which states that a new savings programme will have to be built from a standing start, because efforts so far had ‘historically underdelivered’ – the savings target was previously set at £200m.

Fiona said: ‘Every effort must be made to commence delivery of savings as soon as possible.’

Although, despite the deadline being set for the 7^th January 2024, the leader of BBC, John Cotton, has promised to consult people in the city about its plans.  

Image: Nile

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