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Council to cut spending by £85m, 1,000 jobs to go: Birmingham faces ‘austerity crisis’

Council to cut spending by £85m, 1,000 jobs to go: Birmingham faces ‘austerity crisis’

🕔12.Feb 2014

Spending cuts of £85.7 million have been outlined by Birmingham City Council’s Labour leadership, with a warning of far worse to come next year as the Government’s austerity measures bite harder.

At least 1,000 jobs will disappear at the UK’s largest public sector organisation with further losses likely in 2015-16 as the council struggles to identify another £200 million of savings.

Council tax bills will rise by 1.99 per cent, which is the highest possible increase without having to secure the backing of residents through a referendum.

Sir Albert Bore, the council leader warned of a “financial crisis” in 2015-16 with the certainty that he and his colleagues would be forced to abandon many non-statutory services.

The Government seemed “determined to press ahead with huge cuts in grant to local councils that are unfairly distributed and impact disproportionately on Birmingham,” Sir Albert added.

He explained that the council will have had to cut £822 million from its total budgets between 2010-11 and 2017-18. The figure is equivalent to two thirds of the city’s controllable expenditure and represents an unprecedented assault on local government.

The average cut in spending power for local authorities, as defined by the Government, will be £45 per household next year. Birmingham, by contrast, will suffer a £147 grant cut per household.

The council workforce has been reduced by half since 2010, down from just over 21,000 to below 14,000 full time equivalent posts. That trend is expected to continue, Sir Albert warned.

Total city council expenditure will reduce by £99 million in 2014-15. The brunt will be felt by the Economy directorate with £40 million of savings, followed by £28 million for the People directorate and £16 million for the Place directorate.

Birmingham’s district committees, which run many local services including libraries and community centres, must find £5.8 million in savings in 2014-15 and £8.6 million a year thereafter. Four community libraries are scheduled for closure.

There were a few bright spots in Sir Albert’s proposed budget.

The council will invest an additional £9 million into children’s social services and £1.6 million into adult social care.

But the only real winners to emerge from the package are Birmingham’s park keepers and park rangers whose jobs will be saved after Sir Albert found an additional £2 million to offset cuts. The council leader said consultation had uncovered significant public opposition to cutting spending on parks, and he denied that the council had given in to powerful lobby groups.

Negotiations to cut the cost of the Service Birmingham-Capita £120 million contracts by £20 million are almost complete, deputy council leader Ian Ward confirmed. Cllr Ward said he was “dotting the eyes and crossing the tees” and was certain that the saving would be delivered in 2014-15.

Cllr Ward stressed that the Capita contract has a further seven years to run and that the value of a £20 million annual saving over that time – £140 million – would be considered against the compensation costs that would have to be paid as well as set-up costs for a new IT provider if the council decided to terminate the Service Birmingham deal.

Key savings include:

– Renegotiating the council’s contract with Marketing Birmingham to “focus resources on the areas of greatest priority”. This will realise £1.6 million a year by 2016-17. Marketing Birmingham will be told to concentrate on attracting inward investment and creating jobs.
– Reducing the cost of running the new Library of Birmingham by £1.6 million a year. The Library of Birmingham Development Trust will be required to find £1.35 million of the savings. Failure to do so could result in cuts to opening hours.
– Identifying £900,000 of savings from Legal and Democratic Services. A review of Electoral services is under way.
– Assisting elderly people to be cared for in their own homes rather than residential care will save £5.8 million a year.
– A review of the Early Years service and children’s centres will eventually lead to £12 million savings.
– Sexual health services relating to teenage pregnancy and support for the Connexions service to be decommissioned from 2015-16 to save £8 million.
– Free bulky waste collections to be scrapped, saving £1 million.

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