Birmingham City Council is looking to chop 20 per cent from its back office and administration costs as part of the plan to slash £600 million from its budget.

A week after Chancellor George Osborne announced more local government cuts in 2015/16, the city council’s Labour leadership has now outlined a series of proposals, including centralising support services, to reduce costs and protect frontline services from greater cuts.

The leadership believes that £14 million in savings can be made from its £70 million controllable budget for support services by cutting red tape and reducing duplication.

The council plans to cut the reams of printed documents produced, merge department-based administration staff into central council units, make better use of digital technology and put an end to a complex network of cross-subsidies and internal charges.

There will also be a centralised corporate intelligence unit to carry out research, analysis, intelligence and data gathering for departments.

The announcement comes after Tory Local Government Secretary Eric Pickles forced cuts on local councils, urging them to look at the back office and cut red tape.

The council has already made £17 million cuts since the austerity measures began in 2010.

Albert Bore
Albert Bore

 

A five-year business transformation programme saw major efficiencies through office closures, new council-wide IT systems and cuts of more than 5,000 staff.

The review of support services is the latest in a series of green papers released by the city council this summer as it consults staff and citizens over a fundamental overhaul of services as it looks to reduces its £3.5 billion budget by £600 million over the next six years.

Already consultation is being carried out on the future of leisure centres, services for the vulnerable elderly and disabled and education.

Labour leader Sir Albert Bore has called his initiative ‘the end of local government as we know it’, referring to his search for new ways of working to make the most of the council’s dwindling budget.

Sir Albert said that £17 million had already been saved from back office reforms in recent years.

“Following the service review we think we can make further efficiencies from the back office support services and so protect the frontline service from more cuts.”

Deputy leader Ian Ward, responsible for support services, said: “We believe that this will ensure that information will be used effectively to inform decisions and support delivery.

“Using our data intelligently, moving away from guessing.”

Other plans include centralised policy and strategy, commissioning and communications and marketing units with the aim of making economies of scale, and reducing duplication. The various districts and departments responsible for service delivery will then have to work with the support units.

The idea follows the political leadership model introduced last year which broke down the direct link between a cabinet member and department. Breaking down departmental silos is a particular theme of Sir Albert’s review.

A second support service review later this summer will look at further cutting costs in legal services, ICT and estate management divisions – all of which were rated at costing vastly more than comparable local authorities.

Another step will see the internal charging system ended, preventing one department creating work for another, or departments cross-subsidising each other. A department like legal services has no budget of its own, and charges other departments for advice and work – meaning there is a direct incentive to create more work.

Further reviews are looking at the Service Birmingham IT/call centre partnership, revenues and benefits service and the NEC Group.