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Battle of Birmingham’s black holes set to run and run

Battle of Birmingham’s black holes set to run and run

🕔11.Feb 2013

holesEven before taking over as Labour leader of Birmingham City Council in May last year Sir Albert Bore made much of what he termed a “black hole” in the 2012-13 budget that he expected to inherit from Mike Whitby’s Tory-Liberal Democrat coalition.

To the obvious discomfort of chief executive Stephen Hughes, Sir Albert kept repeating his catchy sound-bite at every conceivable occasion.

Mr Hughes, it should be recalled, insisted there was no such hole in the accounts, merely proposed savings by the coalition that would be landed in the laps of the new Labour administration.

Almost a year later, Sir Albert continues to make political capital out of the black hole claim.

Launching his 2013-14 draft budget last week, setting out £102 million of spending cuts, Sir Albert accused Coun Whitby of bequeathing him a “pie in the sky” financial plan in the form of £24 million worth of cuts that were undeliverable.

He continued: “There aren’t any black holes in this budget. There were black holes all across the previous administration’s budget.”

It’s far too early to make judgment on Labour’s financial acumen, but what can be said is that almost a fifth of Sir Albert’s cuts package relies on events outside of the council’s direct control, or has yet to be decided in firm detail.

Analysis of the draft 2013-14 budget shows that some of the ‘savings’ earmarked for the highest spending departments can only be realised if the NHS and city schools pick up a greater share of the council’s soaring social services costs.

Savings proposals for the Children, Young People and Families and Adults and Communities directorates are heavily dependent on levering in more funding from local health services.

The financial calculations also rely on a claim that the council can save millions of pounds by reducing the number of children in care and by adopting a market-led approach to social services. This is a direction in which the council has been attempting to travel for two years, with limited success so far.

Estimates for £3.2 million annual savings from new contracts for adult residential and homecare services rely on ‘market shaping’ with the intention that competitive prices will stimulate competition and allow new, cheaper, independent sector providers to enter the market.

The council intends to save £2.4 million on externally provided services for children and young people, but the figure depends on the success of a joint commissioning programme with the Health and Wellbeing Board.

One of the most significant savings, £3.3 million in 2013-14 rising to £10 million by 2016-17, relies on remodelling and integrating a range of preventative services including Education Welfare, Integrated Family Support Teams, Connexions and children’s centres. But the savings will only be realised if the new integrated service is successful in driving down the number of children coming into care.

A £1.4 million cut in the budget for child and adolescent mental health services relies on another joint commissioning programme which it is hoped will identify a single provider across children’s and adult services.

Plans to save £400,000 by redesigning the Youth Service involve a financial contribution from the Schools Forum, a body independent of the council that represents Birmingham schools.

A number of savings targets for other departments, including £3.2 million for Corporate Resources and £300,000 for Development and Culture, depend on as yet unidentified cuts. A £500,000 saving for the Local Services directorate rests on securing more efficiencies at the council’s call centre, run by Service Birmingham.

About £20 million of the £102 million cuts identified by council leader Sir Albert Bore rely on NHS funding, private and voluntary sector co-operation, or are yet to be worked out at all.

Failure to make quick progress in these areas would inflict severe financial difficulties on the council and could prove politically embarrassing for Sir Albert, who of course claimed that many of the Tory-Lib Dem coalition’s proposed savings in the Children, Young People and Families directorate were undeliverable.

Deputy Conservative group leader Robert Alden said he feared Labour’s budget was built partly on unachievable targets, particularly a pledge to reduce the number of children being taken into care.

Cllr Alden added: “This budget relies on outside organisations, like the Health and Wellbeing Board, delivering funding for the council. There’s a clear possibility that this might not happen.”

He urged Sir Albert to consider raising money by selling shares in some of the council’s assets.

Institutions that could be disposed of in whole or in part include the NEC and Birmingham Airport, as well as many city centre buildings and land.

Cllr Alden added: “Sir Albert is doggedly refusing to get rid of assets at a time when he is proposing to cut services including reducing the provision of household alarms to elderly people. I don’t think that is the right thing to do.”


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