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Accountants Deloitte to draw up £250m Birmingham council cuts package

Accountants Deloitte to draw up £250m Birmingham council cuts package

🕔09.Sep 2015

A highly controversial £250 million savings package at Birmingham city council will be based on work by financial consultants Deloitte rather than elected members, it has been confirmed, reports Paul Dale.

The firm’s Birmingham office is using a “bespoke demand analysis model” in what amounts to a zero budgeting approach – starting from scratch and working out where demand for services is greatest, and as a result the areas where spending can be cut or scrapped entirely.

The method is sharply different to previous approaches to spending cuts by the controlling Labour group, which involved senior councillors and cabinet members leading service review working parties, the results of which fed into the budget making process.

This time, city councillors will only play an active role in the process once the Deloitte proposals are on the table, raising fears that it may be too late by then to change the thrust of the budget cuts.

There will also be widespread public consultation leading up to publication of draft 2016-17 city council spending plans in December.

News of Deloitte’s involvement emerged this week in a letter from council leader Sir Albert Bore to John Crabtree, chair of the Birmingham independent Improvement Panel which is overseeing implementation of governance reforms imposed on the council following the Kerslake Review.

Some backbench Labour councillors have expressed their concerns, claiming they knew nothing about Deloitte’s role until Sir Albert’s letter was published.

Cllr Waseem Zaffar, chair of the main scrutiny committee, said it was odd, given that one of Kerslake’s main criticisms involved a lack of engagement between the executive and backbench councillors, that the service review working parties which allowed ordinary members to play an important role were being scrapped. He said:

We have a new system where it is predominantly officer engagement and members’ involvement at a later stage.

Sir Albert gave a robust defence of the approach when he appeared before the main scrutiny committee. It was no longer feasible to take a “salami slicing” approach to budget cuts and the involvement of Deloitte’s was crucial to drawing up a Future Council programme setting out what the authority would look like in 2020.

He said the improvement panel appeared keen that the approach should be officer-led in the first instance. Sir Albert added:

What the Future Council 2020 programme is looking at where demand is coming from and what measures can you take that might deter that demand profile.

It’s being taken forward with the assistance of the likes of Deloitte. It’s not being taken forward by members because it’s an officer field at the moment.

There is a point where we have to engage across parties and with all members about what the changes to policy might be in order to set in place the 2020 vision for what this council will be. It’s at that point that members will come into the engagement of these issues.

It’s not a service review approach. This time the culture has been changed. We are looking at demand and need. There will be engagement of the public in October and November.

There are matters around policy that are the field of elected members but the delivery of services in some respects is the field of the officers of the council.

He described the new process in his letter to Mr Crabtree:

The city council has developed a bespoke approach to identifying savings through a demand analysis model. Supported by specialist advisers Deloitte, a series of workshops have been held to assist in the understanding and implementation of this model which, in essence examines the drivers of demand, with analysis targeted at services delivered to clearly identifiable citizen cohorts.

The aim of these workshops was to identify potential changes to present and forecast demand that could be implemented by the Council to deliver the necessary savings that still need to be made by 2020 whilst continuing to best ensure that the citizens of Birmingham receive the priority services they need.

Around 230 “demand management” opportunities have been identified through these workshops. These are currently being developed into cases for change that will be opened up for wider consideration with members, staff, stakeholders, partners and citizens.

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