Further emergency warnings issued by Birmingham council officers

Cllr John Cotton

Birmingham City Council officers have issued further warnings after the leader of the council John Cotton delayed an equal pay liability meeting by a week.

Cllr Cotton said he took the decision to delay the meeting of the Council Business Management Committee, which was due to make a “hugely significant decision on how to resolve the issue of equal pay” as it was “simple common sense”.

He said on X/Twitter that “it would no longer be appropriate for the Committee to make such a consequential decision without the Commissioners having had the opportunity to examine the options and inform the Committee of their view”.

As a result of moving the meeting back, council officers have issued an additional Section 114 and its chief legal officer has given a Section 5 notice, meaning the council’s position might contravene with the law.

Cllr Cotton says he is “disappointed by this” but believes that if the meeting proceeded without the involvement of Commissioners, it would be “contrary to the commitments I have made to engage positively with their support”.

Michael Gove accused Birmingham City Council of being “beset by systemic failings over several years” which have been “exacerbated by instability and churn at senior officer level” in his letter announcing government intervention with commissioners on September 19.

Commissioners will begin to work with the council on Tuesday (September 26) following its extraordinary meeting on Monday, which will outline its Financial Recovery Plan.

The council released its agenda for its extraordinary meeting today and said that £33m of the total £64.9m of savings required this financial year is at risk of “slippage/non-delivery”.

Key projects at risk include:

• Children’s Trust Savings – £6m
• Reducing Bed and Breakfast spend – £5.5m
• Commercial Investment/Property – £4.7m
• Workforce Savings – £4m
• CAB Premises – £3.7m
• Traded Services – £3.1m
• EIP/Localities Hub – £2.5m
• Automation – £1.850m
• Centres of Excellence – £1.8m
• Customer Services – £0.990m
• Fieldworker – £0.8m

The report also presented a forecast of a deficit in business rates income of £27.8m based on 2022/23, due to a challenging economic environment for businesses (resulting in lower than forecast collection rates), a delay in enforcement activity (due to Oracle implementation issues) and an increase in business rates appeals.

There is also projected to be a £2m deficit for 2022/23 in council tax income due to reduced collection rates.

The plan revealed on Monday that the council was “likely” to require Exceptional Financial Support from the government, given the scale of its equal pay liabilities, as well as needing an agreement in place to capitalise on some of its revenue liabilities and repay the associated borrowing over a period of time.

Further reports and decisions will be required on:

• Where spending will be reduced – leading to a revised Emergency Budget for 2023/24
• A Capital Strategy and Assets Review – to identify options to raise funds and minimise borrowing costs
• Redesigning the organisation “around citizens and within available resources” to achieve a Medium Term Financial Plan
• Generating additional income from council-controlled companies and traded services
• An Income Review to maximise sustainable income from all sources, including Business Rates, Council Tax, Grants and other income.

Rachel Fagan, GMB Organiser, said: “This is pure politics from council top brass, piling pressure onto politicians to take what would be a catastrophic decision for the city. The council’s proposals lock workers out of the job evaluation process, risking more discrimination and more debt which would threaten the future of the city’s services.

“Birmingham City Council already owes hundreds of millions of pounds to its low-paid women workers, wages that have been stolen from them over years of discriminatory pay practises, and that bill is growing by the minute. For almost 2 years, GMB has urged the council to work with us in re-implementing the NJC scheme, the gold standard scheme for local government jobs. That would end the discrimination and stop the clock on the city’s mounting equal pay debts.

“The council needs to act quickly, but the people of Birmingham can’t afford for them to get this wrong again. Another sticking plaster fix won’t cut it. It’s time for pay justice.”