Leader denies council on brink of collapse
BIRMINGHAM City Council will have to make “unpopular” service cuts to tackle its financial challenges, the leader has warned.
Councillor Ian Ward said he did not “underestimate the gravity” of the situation faced by his Labour administration but dismissed claims by the opposing Conservative group that the authority was on the brink of collapse.
The leader addressed the chamber during the first full council meeting since the summer recess on Tuesday following a second rare warning from auditors in two years.
Grant Thornton issued a formal criticisism of the council over failed savings plans and the use of £117 million of reserves in two years.
Cllr Ward pointed to the fact the council’s government funding had reduced by £642 million in seven years – more than 40 per cent of its spending – while the workforce had been slashed from 25,000 employees to 10,000 in that period.
Further savings in the region of £120 million are required by 2021/22.
Cllr Ward said: “No easy choice exists if the council is to spend within its means. Services will have to be delivered in new innovative ways.
“The types of choices we make may well not be popular but they will be necessary to meet our financial challenges.” Cllr Meirion Jenkins, the Conservative group’s shadow finance and resources member, said the “woeful” Labour administration had been the first council to ever receive two “s24” notices and argued they had not “grasped the significance” of the situation. He added: “If lessons are not learned this time then you really have to question whether we will get through another year remaining solvent. “In these circumstances it draws into question the whole future of the council. It is that serious.” Fo rme r leader Cllr Sir Albert Bore, who recently admitted the council had been “complacent” over its own financial failings, was critical over the auditors’ findings but said he was “assured” over the level of reserves left – £308 million – and the new protocol established to avoid budget overspends.
He argued that for those reasons Birmingham was not another Northamptonshire County Council – where government commissioners have had to take over the finances due to overspending and budget failures.
Cllr Ward described the Conservatives’ proposed amendments as “unhelpful” and said: “I do not underestimate the gravity of the situation.
“But you can’t have it both ways, supporting a balanced budget then opposing the measures needed to get us there. It is one or the other.”