The financial crisis in Birmingham

The council forecast an overspend of £87million for this financial year (23/24), and a gap of £164m for 2024/5. Councillors have come up with a savings programme to address this budget gap and need to find over £250m worth of savings over the next 12 months. That means cuts to services.

The current situation is a serious concern for UNISON. Our members work hard to deliver vital public services. Their productivity increased by over 17% between 2014 and 2021 which is a testament to their commitment to the services they provide. Now, after years of being forced to do more with less resources they face the twin challenges of more service cuts and swingeing job losses. The future looks bleak for public services in Birmingham.

Birmingham City Council operates in very difficult economic and social conditions. It is the fourth most deprived area in the UK outside of London, and has higher than average levels of unemployment, particularly among young people.

39% of households were living in relative poverty in 2022 which is more than double the next authority outside London – and 42% of children were living in poverty in 2021.

Average earnings are below those across the wider West Midlands and the UK. Compared to the UK, Birmingham has a high percentage of citizens under the age of 65 which creates a huge demand for children’s and working age adult services – our funding does not reflect this. Unlike adult social care, children’s social care is not means tested and Birmingham has been disproportionately affected. There has also been a 42% increase in those aged between 16 and 65 who need the support provided by council services.

Funding has fallen in real terms, by 13.9% between 2014/15 and 2019/20, and costs of providing services have risen significantly over this same period (20% higher in 2021 compared to 2014).

These challenges could have been predicted in 2014, but there was no attempt by the government to match the resources they were making available to the needs of people in Birmingham.

This lack of fair funding means that, at best, the council is maintaining existing service levels – but demand is constantly increasing which creates more problems going forward.

This government claims that it has increased council funding, but the reality is that any increased funding has been overtaken by the higher inflation and increases to other costs caused by their economic policies.

Economic growth forecasts and the spending plans outlined in the chancellor’s Autumn Statement all point to more real term spending cuts for local authorities. Slicing services to fit reduced budgets won’t deliver the real change we need to make future funding for local councils fair.

We need change now to help us deliver services effectively in the future. It’s what people in Birmingham want and deserve. And they are not alone. We need UK-wide reform to ensure that our services are fit for purpose and can meet the demands placed upon them wherever they are.

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