More to be done one year after council bankruptcy

The Birmingham Local Conservative group said it was deeply worried about the council's financial position a year after it issued a Section 114 notice

One year after Birmingham City Council effectively declared itself bankrupt, opposition leaders described it as "deeply worrying" commissioners brought in to help the authority said more needs to be done.

In a report, commissioners said the council did not "have sufficiently robust plans to balance the budget in 2025-26 and subsequent years".

Councillor Robert Alden, leader of Birmingham Local Conservatives, called it "deeply worrying" that the Labour administration did not appear to have the right plans in place.

A Birmingham Labour spokesperson said the administration "had buckled down" to strive for financial stability and protect services.

The council issued a Section 114 notice declaring itself effectively bankrupt in September 2023 and needs to make £300m in savings.

The commissioners' report is due to be discussed by the council's cabinet on 10 September.

In it, commissioners advised the authority to strengthen spending controls and "work at pace" to identify further savings.

They noted savings plans for future years have been drawn up, but said it was unlikely all the savings identified for the next financial year could be delivered.

The commissioners advised the council to "set out a compelling change story" and said the "financial position needs to be managed like the crisis it is".

But they acknowledged it was a "difficult task" and that progress had been made.

The Labour-run council was still a long way from balancing its books, commissioners said

Mr Alden, leader of the Conservative opposition on the authority said: "With continued delays to delivering the job evaluation scheme needed to fix equal pay, Oracle still not fixed and in-year savings delivery still off track, the council's financial position is just getting worse.

"If Labour refuse to adjust their strategy and get a grip of this appalling situation then residents will be hit harder than ever."

Oracle is a problem-hit IT system at the council which has seen potential costs spiral to five times the original estimate.

Birmingham City Council has had to deal with almost £3bn of debt

In response, the Labour spokesperson said the council's financial difficulties followed "14 years of Conservative austerity that saw £1bn of funding taken from our city".

However, they accepted the council needed to improve.

"We have buckled down and brought in greater efficiencies, tighter financial control and are transforming our services fit for the future," they said.

"We continue our work to transform the council and put it back on the path to financial stability whilst protecting the services that matter most to the people of Birmingham."

The new Labour government would bring forward plans for "sustainable long-term funding for councils", the spokesperson added.