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Spending axe descends as Birmingham council ‘reinvents itself’ in the age of austerity

Spending axe descends as Birmingham council ‘reinvents itself’ in the age of austerity

🕔18.Sep 2013

Huge tranches of Birmingham City Council may disappear as the local authority “reinvents itself” to cope with the age of public sector austerity.

Council leader Sir Albert Bore will publish details in December of proposals to abolish a range of services and he has not ruled out getting rid of entire departments in an attempt to find £825 million of savings.

With the future inevitably centred on providing a core of statutory services, and leaving the delivery of many discretionary services to the private and voluntary sectors, the council will have no need for so many departments, or so many highly paid chief officers.

The Adults and Communties, Children, Young People and Families and Local Services directorates will probably remain intact, but the future for housing, development, planning, sport and culture is uncertain.

Announcing the latest in a series of service reviews, Sir Albert said he expected the city’s financial plight to be so grave by 2016-17 that the “decommissioning of services” was inevitable.

He intends to publish a “white paper” before Christmas setting out firm proposals to axe services in a move that could put him on collision course with Labour councillors who believe Sir Albert is embracing too enthusiastically the need for widespread cuts.

Sir Albert, who repeated his claim “that this is the end of local government as we know it”, has ordered Labour cabinet members to readdress the service reviews to find additional savings after concluding that proposals for cuts so far do not go far enough to meet swingeing cuts in government grant over the next five years.

Everything that the council does is being assessed against two benchmarks – is the service fit for purpose, and does it deliver outcomes in line with key policy priorities.

The fit for purpose test involves comparing Birmingham council services to a value for money criteria laid down by Cipfa, the Chartered Institute of Public Finance Accountants.

Sir Albert said he was taking a “methodical and analytical” three-step approach to radically restructure the council organisation.

The first step involves taking easily identifiable savings, the second step considers a more radical approach to change the way services are delivered, and the third and final step is to “cease services on a prioritised basis”.

The latest service review dealing with the Birmingham economy identifies £13.7 million of savings.

Proposals include:

  • Cutting by £6.4 million the annual levy the council pays to Centro, the West Midlands Integrated Transport Authority.
  • Saving £1 million by renegotiating the Birmingham Highways PFI with Amey.
  • Saving £3.2 million by increasing outside income from the council’s partnership activities and stripping out back office costs.

Sir Albert said: “These are cuts we feel we can introduce and must introduce. Our suspicion is the budget constraints will be so severe that we will have to move beyond step two and on to step three, which means discontinuing a number of services.

By 2015-16 I think we will be looking at step three, but this is not something that will be unique to Birmingham City Council. I think you will find local government as a whole contemplating doing what we are doing but they won’t be doing it in quite the methodical way in which we have approached the budget making process.”

Cabinet member Steve Bedser, who led the service review on the Birmingham economy, said the council could no longer contemplate a “salami slicing” approach to finding savings. “We have to consider whether or not we can afford the salami at all”, he added.

Cllr Bedser said: “We have to have a discussion about what it is we should stop doing. We have to be forensic about how we make this judgment.”

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