Budget crisis panel warns council of tough road ahead But ‘positive steps’ being taken to achieve £78m savings

APANEL of financial experts is still yet to be convinced that Birmingham City Council will deliver £78 million cuts next year without plundering reserves or building up another budget black hole.

But the independent experts from the Local Government Association have, in their latest report, praised ‘positive steps’ taken by the city council to ensure cuts will be delivered as planned, though warned there could be problems ahead.

They were called in after the council built up a massive £49 million black hole in its budget this year – much of it a result of failing to deliver savings through closer working with local health service.

Government overseers were concerned that the council had promised cuts it could not deliver and, having drained a large chunk of its reserve funds to plug the hole, would simply fall deeper and deeper into the red.

But the independent financial review found that the council is learning the lessons.

It concluded: “There is clear evidence that the council has made positive steps in response to the recommendations of the independent financial review team.

“There is, understandably, a great deal more to do and the scale and pace of change required should not be underestimated. The council needs to take stock of progress on a regular basis.

It warned that the council leadership needed to ensure it remains focused on delivering savings and plan ahead for cuts in future years.

“There are still demand pressures in key services which threaten the council’s financial position. Funding reductions beyond 2017/18 will require additional savings potentially resulting in the need for further difficult decisions. It is important that the council gives early consideration to these to allow sufficient time for planning and delivery.”

A key area of concern is a massive reorganisation of management and staffing which will see thousands laid off in a bid to make £40 million a year savings from the wage bill by the end of 2018. The report suggests the council allows more time to implement such a major change to the way it works.

Labour council leader John Clancy welcomed their findings which he pledged to take on board. He said: “As the panel notes, we have spent valuable time developing our delivery plans.

“The report says we now have in place plans which show greater clarity and consistency in how we will implement the savings and the huge cuts we have to make.

“We take on board absolutely the panel’s advice that the council must remain focused on delivering the substantial financial savings set out in the 2017-18 budget and that the scale and pace of change required should not be underestimated.”

The report says we now have in place plans which show greater clarity and consistency John Clancy