Birmingham City Council faces making drastic cuts

BIRMINGHAM City Council will have to cut £600m from its budget over the next five years.

It is estimated that around 1,000 council workers will be made redundant by 2016 as a result, while council taxes are likely to be increased and services in non-essential areas such as leisure and sport are likely to be severely curtailed.

The council said its grant from the Government has dropped by £140m, 14% in cash terms, in just two years.

Next year it is forecasting further grant cuts of at least 6% (£52m) but warns this situation could be worse.

“The Government is introducing significant levels of uncertainty and instability at a very late stage in local authorities’ planning cycles. For instance, the Government intends to transfer more responsibilities from the council to schools but is taking more money off the council than is currently spent on these services. So the grant reductions could be significantly more,” it said.

The council suggests over a six-year period from 2010/11 to 2016/17, the forecast total Government grant will reduce by £332m. At the same time, it says, it will need to fund unavoidable cost increases due to the effects of inflation, the changing basic needs of the population, changes in legislation and financing costs.

“These are expected to cost £273m extra by the end of 2016/17, meaning that we will have to make savings of over £600m or more by that time – that’s around 48% of the total spending over which the council has control,” it said.

The council’s immediate challenge for next year (2013/14) is to save around £120m of the £600m total.

Council leader Sir Albert Bore blamed the cuts on the coalition government giving it less in grants than anticipated.

And he warned: “We have got to the end of the road when it comes to salami-slicing. We will now have to either stop or de-commission services. “I’m not looking forward to this, but it is what we have got to do.”

He said before any cuts to services were made, there would be a full consultation, starting next month.