The city’s controversial Capita contract will be slashed by at least £20 million – and Marketing Birmingham faces major cuts as the council chops £87 million off its budget.

More than 1,000 Birmingham City Council staff will be axed in new cutbacks, it has been confirmed, with its £120 million-a-year Service Birmingham spend being curtailed.

The job losses mean that in the last four years an astonishing 7,000 workers have left the country’s biggest local authority amid swingeing budget reductions.

Council tax bills will rise by 1.99 per cent – the maximum before a city-wide referendum is triggered, meaning everyone’s bill will rise by around £23.

The flagship new £189 million Library of Birmingham had been originally ordered to make £1.65 million of cuts to running costs – and threatened with opening hour reductions if this wasn’t achieved.

Officials scaled this back – but the fund to buy books and hold events at the library will face cuts, and it was admitted that it was “substantially” more expensive to run than the old Central Library.

There will also be a move over the next two years to reduce the funding to support major events and promotional work through Marketing Birmingham, while encouraging the organisation to seek alternative funding. And £5.8 million will be saved by caring for the elderly in their homes, rather than offering residential care.

But the under-threat park keepers and rangers were saved after officials managed to find £2 million in the budget to cover the costs.

City leader Sir Albert Bore said Birmingham was being unfairly treated by the government – and is facing an even bigger problem next year.

He said: “The indicative figures for the next year (2015-16) are even more unfair. Birmingham is due to receive a cut of £147.42 per dwelling, whilst the national average will be just £45.32.”

Birmingham Council House.
Birmingham Council House.

Sir Albert said that with £375 million cuts already made since austerity began in 2010, total budget reductions could reach £822 million by 2018.

He said: “The average cut in spending power as defined by the Government for 2014/15 across England will be £71.44 per dwelling. In Birmingham it will be £145.33.

“The city council has been making radical changes to the way we work and achieving significant efficiency savings for several years, under both this political administration and the last.

“We have reduced our staff by 33 per cent since 2010 and a further 1,000 jobs will go in the year ahead.

“However, all of this becomes harder each year and in the budget set out in this document we have found it extremely difficult to maintain the full range of services we provide.”

City Labour MPs supported this view, with Jack Dromey saying the city was “unfairly suffering the biggest cuts in history”.

The city council’s deputy leader confirmed that a deal has been struck with outsourcing giant Capita to cut the authority’s Service Birmingham contract by £20 million per year.

Coun Ian Ward (Lab, Shard End) said: “We asked Service Birmingham to take £20 million from the budget and they have put a proposal back to us doing that.

“It it just a formality.”

A full review of the contract, which could see the seven year deal terminated will be completed in the next couple of weeks.

Coun Ward said: “By the end of month we will have the numbers to compare the costs over the term of the contract. But whichever way we go there will be a £20 million saving.”

Asked if £20 million is therefore a starting point for the contract reduction, he replied ‘yes’.

Coun Ward has previously promised to have the contract published online, in a redacted form to protect corporate confidentiality, by the end of February.

Only the crisis-hit children’s social care department is being spared from cuts and will in fact see a £9.2 million budget increase.

There was confirmation that four community libraries are likely to close with cuts totalling £300,000 to the book fund, events and exhibitions and the mobile library service.

Coun Ward said that the Library of Birmingham Development Trust has agreed to find £500,000 in savings and the council will plug the rest meaning the opening hours will be maintained for the next year while a longer term business plan is developed.

He said: “The library specifications and running costs were set out in 2007, during very different times. But in common with other council services there will need to be cuts.”

He said that as a consequence the running costs are at a ‘different level’ to those of the old Central Library. “The costs are substantially greater.”

The free bulky waste collection has been withdrawn to save £1 million.

The Amey highways repair and maintenance deal, another major contract which like Service Birmingham was signed before the austerity era, will also be cut by £1 million a year. There are also major changes to social care and education with efficiencies, some cuts and some funding, such as children’s centres early year provision being transferred to the NHS, schools or other groups.

And there was brighter news for Friends of Parks groups – as some threatened redundancies of park keepers and park rangers were cancelled due to a cuts reduction of £2 million.

The council tax rise, the first in three years, will see the average Band D bill, before fire and police charges, rise from £1,113 per year to £1,136.

The Conservative group deputy leader Coun Robert Alden (Erdington) responded that many households face a £100 per year increase in costs, after taking account of the new £35 charge for garden waste and the costs of bulky waste collection.

Mr Alden added: “The council spends £1 billion a year on procurement of goods and services and it is here that savings could be made. They are talking about £200,000 savings when any private sector organisation would be looking at £5 million.”

He added that further cuts could be made to the wheelie bin promotional budget: “With those amounts they could easily cover the £700,000 savings on library closures, or the 80 per cent cuts in school crossing patrols.”

Gillian Whittaker of the GMB union said: “This is a further blow to Birmingham City Council workers. The services across Birmingham are already stretched and our members are already over-worked.”