City council gets a month to find £300m savings

Government commissioners led by Max Caller were appointed when the council effectively declared bankruptcy

Government commissioners at Birmingham City Council (BCC) have set a deadline of 7 January for the authority to identify £300m of savings over the next two years.

The council effectively declared itself bankrupt in September, as it faced the dual challenge of an equal pay liability of £760m and an £80m overspend on an IT project.

In a report to the council’s cabinet, the commissioners say it will not be possible to fully address the council’s budget gap in 2024-25, because of a "lack of any early budget work" and there needs to be a "step change in the level of organisational focus and grip".

On Monday, an independent report in the governance at the council identified what was described as a deep-seated blame culture which had worsened its financial crisis.

The commissioners' comments being discussed by cabinet on 12 December lay out the position starkly in just one page.

The first of five bullet points simply reads: "The BCC financial position remains extremely serious and challenging."

The document goes on to say the council "is between a rock and a hard place".

Finance officials say the savings will have a "profound impact" on the way the council works

A report from the council's own finance director Fiona Greenway says a new savings programme will have to be built from a standing start, because efforts so far had "historically underdelivered".

The savings target had previously been put at £200m.

"Every effort must be made to commence delivery of savings as soon as possible," she continued.

The Labour leader of the council, John Cotton, had previously said there would be "no fire sale" of assets, but that "everything was on the table" as it fought to bring the overspend under control .

However, Moseley councillor Kerry Jenkins said in a post on X (formerly Twitter) she was "firmly rooted in the reality of the sheer awfulness of what is to come".

'Brought to her knees'

Conservative group leader Robert Alden said: "This is a truly tragic day for Birmingham residents. This finance report lays clear the impact of 11 years of Labour rule on our great city."

He added the authority had been "brought to her knees".

Despite the 7 January deadline, the council leader has promised to consult people in the city about its plans.

Mr Cotton told BBC Radio WM: "We'll be bringing forward details of all those proposals in the coming weeks, and we're inviting people across the city to comment on that as part of the budget consultation process."