Council faces hard choices on £350m debt - leader

Birmingham City Council faces hard decisions over how to address its £350m cash black hole, its leader says.

John Cotton was in the hot seat on BBC Radio WM to take questions from presenter Kath Stanczyszyn, as well as from listeners.

Despite the major financial difficulties, Mr Cotton urged city pensioners to make sure they claimed pension credit after the government cut winter fuel payments.

Commenting on the ongoing financial situation, Conservative councillor Meirion Jenkins said "it is a catastrophic situation that will cost the residents of Birmingham dearly".

Mr Cotton also admitted the authority is "still in a mess" with implementing its Oracle IT system, and work was on the outstanding mass equal pay claims from staff is still ongoing and "subject to a legal process".

'Bring budget into balance'

He explained to WM listeners that the council was still working through a number of challenges around its finances, a year after it issued a section 114 notice declaring itself effectively bankrupt.

He said a further £50m has been identified in the council's debt, which was originally calculated as £300m, in September 2023.

"There has been an emergence of £50m... due to additional demand for service," Mr Cotton said.

"We have to manage that as we seek to bring the budget back into balance.

"The council will need to reduce spending in a number of areas and will include difficult decisions which will take place later this year."

Mr Cotton however, rejected Mr Jenkin's comments, and said: "We have been working incredibly hard to deliver what is an unprecedented level of savings.

"We are developing further plans for the budget that will come forward in March and we have got a far more constructive and positive relationship with new government."

Conservative councillor Meirion Jenkins said the council's financial "catastrophe" is costing Birmingham residents "dearly"

He explained that he was not in a position to rule out further council tax rises.

"At the moment we've not taken any final decisions on the budget for next year in regards to council tax," Mr Cotton said.

Responding to concerns the closure of four of the city's nine adult social day care centres will leave vulnerable families in deprived areas without access to support, he said "individuals want to receive care in different ways".

"Some people don't want to access centre-base provision and we're looking at how we can remodel provision and respond to individual needs," he stressed.

'Pretty heavy failure'

With regard to the Oracle IT system, which was supposed to streamline payment and HR processes, Mr Cotton accepted full implementation was now more than three years overdue and would not be in place until 2026.

He said: "We're not there yet. There was a pretty heavy failure with the implementation of Oracle.

"As I've had to explain previously, there was a clear mandate that we adopt the council processes to fit the new system, and that was not complied with.

"We're [now] doing this at the right pace in the right way, taking account of all the changes. This has been a real mess," he acknowledged.

Commenting on the winter fuel allowance cuts, Mr Cotton said it was "one of the most toughest decisions the government has had to take".

"It's really important we get people signed up to pension credit. We are working with organisations across the city to make sure those who are entitled to pension credit get that," he said.

The city council is still more than a year away from fully implementing its Orcale IT HR system, which has been originally earmarked to start operating in 2021

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With regard to the equal pay claims, which... , Mr Cotton said the authority was "completely resetting" its pay and grading model.

"[We are] eliminating the discrepancies to make sure everyone is paid fairly," he said.

When asked if the previous administration at the council will be be held accountable for its failures, Mr Cotton said an audit investigation was ongoing.

He said: "We're ensuring there is accountability. The only thing that concerns me is that there was clearly failures in governance that resulted in some of these problems emerging within the council

"I came in as a leader with a mandate to fix these issues and that's what I'm focused on doing."