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Birmingham’s budget crunch time

Birmingham’s budget crunch time

🕔25.Nov 2016

Birmingham’s Labour Group of councillors meets tomorrow with the 2017/2018 budget top of the agenda.

Birmingham city council faces a mammoth task in making cuts to its budget as the austerity agenda continues to bite. The challenge is made more difficult as demands grow in service areas, not least in social care, and as the impact of previously undelivered cuts knock on to the years in the rest of this Parliament.

Budget cuts for 2017-18 total around £100m. Labour councillors are claiming that figure has been significantly reduced by Cllr Clancy’s insistence on cutting the council’s deficit top-up contribution to the West Midlands Pension Fund and it’s Service Birmingham financial commitments with Capita. Millions have been saved and negotiations continue on both fronts it is claimed.

The recent Cabinet decision to ensure people on benefits are not subject to bailiffs trying to recover Council Tax is being seen as a major win. But Cllr Clancy had to back down from not paying the pension contribution, but remains firm on the deficit top up.

The council leader’s stance on the Pension Fund had caused something of a rift with his fellow council leaders in the region, with some suggesting it would undermine the already delicate relationships that exist around the West Midlands Combined Authority (WMCA) table. At last Friday’s WMCA meeting in Nuneaton (yes Nuneaton….it turned out to be a little too far for some of the leaders based in the west of the region) some of those relationships were taped back together.

Cllr Clancy will be looking for his group to sign off the budget before it goes forward to the Council process of consultation and approvals. But the politics are especially tricky as the cuts move much deeper into service areas, with councillors fearing the consequences from their constituents.

With the prospect of all-out elections in 2018 with councillor numbers to be reduced by 19, the fear among many Labour councillors is palpable. Some elected members will not get a seat, the party could pay the price at the ballot box for eight years of cuts whilst the performance of the national party may continue to inhibit the prospects of local politicians wearing a red rosette.

The recent challenging report from the Birmingham Independent Improvement Panel raises the stakes even higher for Birmingham’s council leader as well as the senior management team including senior finance officers.

Clearly, with around £500m of cuts since 2010, the scope for yet more salami slicing is limited to say the least. Now, it’s all about people and jobs with the ‘back office’ likely to be the subject of major reform.

It is no surprise that turf wars are being fought out, such as children’s services versus parks. How, some argue, can we close children’s centres and community libraries when children’s services is a council priority? Closing leisure centres may save money immediately, but arguably will make Birmingham an even more unhealthy place and store up additional health costs for the future.

So the question is whether Labour councillors can be persuaded to take a city-wide strategic view, or will they revert to a ‘not in my ward’ stance?

Chamberlain Files visitors should not expect to see any proposals for alternate bin collections this side of 2018.

The latest management phrase doing the rounds is an ‘active budget’. This appears to be shorthand for ‘the budget we agree in February but may not be the budget we actually deliver’. In other words, every budget line will be under constant scrutiny and could be changed at any time during 2017-18. Some estimates suggest that 40% of the cuts to be set out in the initial budget may not be deliverable.

Chamberlain Files does not believe that will satisfy the Improvement Panel given the current year’s budget included about £50M of savings that turned out never to have been deliverable.

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