Birmingham City Council leader issues 'difficult' warning to taxpayers after council 'bankruptcy'

The leader of crisis-hit Birmingham City Council has issued a stark warning to taxpayers  – declaring “the next two years are going to be difficult”.

The local authority must find £200m of savings to help plug its near £1bn shortfall due to equal pay liabilities and fixing its doomed IT system, Oracle.

Pressure is building on leader John Cotton after the council was declared bankrupt this summer, with an immediate spend control put in place after being slapped with a section 114 notice. The local authority has also accrued another £87.4m of deficit, largely because of rising demand and complexity in children’s, families and adult social care.

Next week, a draft budget will be published that will outline where the £200m-worth of savings will come from with local parks, leisure centres and vital services all at risk. Coun Cotton said there would not be a fire sale of assets but warned tough times were on the horizon as the city heads into 2024.

“We know taking £200m out of the budget over the next two years is going to be very difficult and it’s going to involve some really stark choices,” Coun Cotton told BBC WM. “We want to ensure we still deliver the key services the people of this city need and rely upon.

“It’s clear we have to make some big decisions going forward. It’s not just about cuts or changes to services, but looking at how the council does its business as well. Where there is duplication within the council, that needs to end. Where there are opportunities to bring services together and deliver them in a different way, we need to be doing that to ensure we’re not only driving savings but delivering services for the people of this city.”

The leader, who replaced Ian Ward in May, was also asked about the potential loss of Sutton Park before outlining how “everything is on the table” in terms of helping to make up the £200m needed to drag the authority out of the dire financial mess it finds itself in.

”We’re looking at all sorts of options surrounding things at the moment,” he said. “The city’s green spaces and the parks are really important.

“Given the situation we face, we have to look at everything that’s within the council’s budget and everything within the council’s ownership but that is not to say we are bringing forward a fire sale of assets or we’re going to be disposing of serious things that matter to the people of this city. 

“The council owns lots of different assets, small pieces of land and things like that, where we’ve already been disposing of over a certain period.

“Clearly, we’re having to accelerate some of that process and that will be a part of the plan we’re bringing forward in the disposal of assets. We also need to ensure we’re looking to the longer term i.e. sites that could become major employment opportunities in a city with massive unemployment problems.

“We certainly need those things. In a city that’s facing the housing crisis we’ve got, we need to ensure we’re releasing sites that enable additional housing. That’s the kind of thinking that will go into how we approach asset disposals.”

The all-important meeting to discuss Birmingham City Council’s intended budget for 2024/25 will take place on Tuesday, December 12. A public consultation will also take place following the publication of the council’s intentions with a budget set for the upcoming financial year in February.