Birmingham Council – Europe’s largest local authority – is planning to save £308 million by 2015, chartered accountant Coun Randal Brew has told members.
Coun Brew, former Lord Mayor of Birmingham, and now Cabinet member responsible for the city’s finances, made no secret of the task ahead.
He said the savings worked out at £300,000 every working day for the next four years with the first £177 million due in the coming financial year – £40 million worse than anticipated.
Coun Brew was speaking at the ICAEW-Grant Thornton Business Confidence Monitor breakfast at the Hotel du Vin in Birmingham.
Government funding for local councils would fall 28 per cent over the next four years, said Coun Brew.
But he gave a strong hint that Birmingham’s council tax would be frozen next year.
“If we have a zero increase the Government will pay us the equivalent of a 2.5 per cent increase and that’s good business for the local council and its citizens. I don’t think anyone’s going to fight against that,” said Coun Brew.
Coun Brew said the city, which employs 51,000 people, was seeking economies through closer co-operation with other public sector bodies including the NHS and the police which, collectively, account for £7.5 billion of public spending in Birmingham.
He had written to the council’s suppliers looking for reductions in its bills. So far it had yielded £1 million of savings.
The council was consolidating offices, outsourcing the collection of council tax and looking at more efficient ways of spending money on services for children, young people and families, for instance.
Coun Brew said some reports claimed the council was sacking all its dinner ladies but this was not true. It was setting up a social enterprise company with £50 million turnover to provide school cleaning and school dinners. The company would have the opportunity to expand its business.
He said the city was keen to hear people’s views on its proposed budget but warned that anyone who felt a particular service should be protected would need to suggest other areas where savings could be made.
On the establishment of a Local Enterprise Partnership for Birmingham and Solihull, Coun Brew said the city had hoped for it would include all the metropolitan councils in the West Midlands.
Earlier, Jon Roberts, head of Midlands Public Sector at Grant Thornton, said the latest BCM survey showed a gap between past performance and future expectations in the West Midlands.
Respondents seemed to believe turnover and profits would pick up in the New Year but he feared their confidence was “a bit over-played” in view of the impending impact of the cuts. The private sector was likely to feel the first impact of public sector spending cuts, he warned.