Council has ‘mammoth task’ to balance budget

Authority facing more scrutiny after £49 million overspend

BRITAIN’S biggest council is facing a “mammoth task” to balance its budget after a £49 million overspend, according to a critical report.

The authors also warned that Birmingham City Council’s “flawed” financial planning and the slow pace of its organisational shake-up “risks its future success”.

The government-appointed Birmingham Independent Improvement Panel ordered extra oversight after the failure of the Labour-run council to meet its spending targets this year.

An independent auditor will now be called in to review the next budget after the overspend.

The council has, in particular, failed to secure major savings through closer working between social services and the NHS.

In addition, the panel of local gov- ernment and business experts has again raised concerns at the slow progress of change in the authority in a letter to local government secretary Sajid Javid.

The letter, signed by panel chairman John Crabtree, stated: “There was insufficient understanding and ownership of the council’s 2016/17 budget and a lack of comprehensive and robust delivery plans for the budget reduction measures that were required to balance the council’s budget.”

The panel issued repeated warnings to the council over the last year and said the authority was having to rely on reserves to balance its books this year, leaving a further £78 million in savings to find next year.

“This represents a mammoth task for the council, to be achieved over a very short timescale,” it added.

Leader of the Lib Dem group, Councillor Jon Hunt, hit out at the council leadership, saying: “There has been a lack of grip this year in managing the city’s finances.

“It is astonishing that even energy saving targets have been abandoned.

“The greater concern is that next year’s budget will be as unrealistic as this year’s has proved to be.”

It is almost two years since the oversight panel was appointed in the light of the damning Kerslake review of the council and they are still highlighting weaknesses in capability, capacity and governance.

Meanwhile, child protection services remain inadequate and the education service is still under supervision of a government com- missioner. In December 2014, the then local government secretary Eric Pickles gave the council a year to improve or face direct takeover from Whitehall.

Now council leader John Clancy faces at least another six months under the panel’s watchful eye as members have suggested they continue at least until March 2017. He welcomed the report of the council’s “critical friend” but pointed out that it concluded some progress had actually been made.

He said: “The panel is correct to recognise the extent of the extremely challenging circumstances facing the council as it focuses on developing a robust medium-term financial strategy – a challenge made all the more difficult by year-on-year cuts to government grant allocations.”

Council chief executive Mark Rogers added that balancing the books was not a task the authority would shy away from.

There has been a lack of grip this year in managing the city’s finances Leader of the Lib Dem group Councillor Jon Hunt