Commissioners warn Birmingham it will be “extremely difficult” to set lawful budget next year, tell leadership to "grip this challenge"

The commissioners sent into Birmingham City Council have said it will be "extremely difficult to set a lawful budget for the forthcoming year" if the local authority does not make steps in the next month to find ways to close its budget gap for the 2024/25 financial year.

The comments came in a 'commissioner review' report considered by the council's Cabinet yesterday (14 November).

The Levelling Up Secretary, Michael Gove, appointed commissioners in October after Birmingham issued a section 114 notice in response to equal pay liabilities of up to £760m. The council is also grappling with the implementation of a costly IT system.

In a report published last week (8 November), the council's s151 officer, Fiona Greenway, estimated the council needs to deliver £165m of savings in the 2024/25 financial year, alongside a further £35m of savings in 2025/26.

Noting that the council must identify viable savings options for both 2024/25 and 2025/26 "at pace," the commissioner review called on all members of the corporate leadership team to "grip this challenge and evidence practical" progress in the next month.

The commissioners, who are led by local government troubleshooter Max Caller, said the response should include an orderly and targeted asset disposal programme to begin this year to generate the capital receipts that will be required to reduce the need for unsupported borrowing and reduce the revenue consequences of debt.

The review set out several requirements for the council's budget plans, including that it issues cash savings targets to council departments for both 2024/25 and 2025/26 with the instruction that departments must identify credible savings options.

The commissioners also require the council to set a clear budget timeline that includes time for political consideration of savings and due diligence by officers.

They said previous budgets had been "characterised by undeliverable savings and understated service growth and inflation" and called for the council to now "properly use data" to ensure service growth forecasts are robust and inflation assumptions "prudent".

Birmingham should also review its current base budget to ensure it is not building on a base that is "structurally unsound".

The council must provide updates on its financial position at every cabinet meeting until a stable and deliverable budget can be managed without support.

Adam Carey