The financial crisis at Birmingham City Council has taken a turn for the worse, with the local authority scrabbling to find a further £65 million in savings.
It is likely that another 1,200 council jobs will disappear next year, on top of about 2,400 this year.
Leaders of the city’s Conservative-Liberal Democrat coalition launched a major consultation exercise, inviting members of the public, trade unions and organisations to comment on the 2012-13 council budget and to have their say on where the spending axe should fall.
Less than nine months ago, the council thought it would have to respond to the Government’s financial squeeze by cutting £350 million over four years. That figure has now risen to £407 million, partly as a result of higher fuel costs but chiefly because councillors have backed away from imposing highly controversial changes to adults social services.
An attempt to save £53 million by scrapping care packages for adults with “substantial” needs was ruled unlawful by the High Court earlier this year. The coalition had intended to save money by asking 4,000 vulnerable people to seek help from voluntary and independent sector providers instead.
But the idea has been scrapped as unacceptable, leaving the council with a huge hole in its budget.
Proposals to save about £5 million by changing eligibility to free home to school transport have been put on hold after it emerged that more than 5,000 children with disabilities and learning difficulties would be affected.
City council chief executive Stephen Hughes said: “We are asking people how they would like us to go about achieving £65 million of savings. If someone has some ideas that don’t involve losing any jobs then I would be happy to listen to them, although I don’t see how it could be done.”
The likelihood of more jobs going was announced on the day that unemployment in Birmingham hit 12.9 per cent. But Mr Hughes insisted the council was not “throwing people on to the dole queues”.
Many of the people leaving the council were taking voluntary redundancy, retiring or moving into private sector jobs, he said.
Mr Hughes pointed out that the local authority has direct control over only a third of its £3.5 billion budget. The rest of the money, mainly in government grants, is “ring fenced” and cannot be cut.
It mans that by 2015, on current predictions, about a third of the controllable budget will have been cut.
Mr Hughes added: “The issue is stark. We have a statutory responsibility to provide caring services for adults and children, so the question is how do you balance that against the discretionary activities like cultural services that are so important to many people?”
Possible ways of achieving the savings have been sketched out in a consultation paper. Adults social care could face a £30 million cut, while the Children, Young People and Families department could lose £22.6 million off its budget. More social service provision is likely to be farmed out to the independent sector and more money will be spent on devising ways to help elderly people live in their own homes for longer, including installing a system of sensors which monitor individuals and sound an alarm in the case of falls or other problems.
More than 500 jobs are at risk in the Adults and Communities department and 314 in Children, Young People and Families.
The consultation paper notes: “We will look at the cost effectiveness of our internal services, both in terms of whether we are providing the right services as well as considering if those services could be provided at lower cost by the independent or third sectors.”
Other proposed savings include:
l Privatising the city council’s golf courses.
l Review the free tipping of waste service for charities.
l Review the financial support for St Patrick’s Day Parade, Eid and Vaisakhi festivals.
Councillor Randal Brew (Con Northfield), the cabinet member for finance, said: “We are facing severe financial pressures. We are being perfectly plain and open, this is a meaningful consultation.
“Absolutely no final decisions have been taken yet, now is the opportunity for citizens to make their views known on what is proposed by elected members before our final budget is set next year.”
Councillor Ian Ward (Lab Shard End), deputy leader of the opposition Labour group, said: “This is terrible news. More people are likely to lose their jobs and I do not agree with the claim that they will find employment in the private sector. You only have to look at the unemployment figures to realise that firms in Birmingham are not providing work for those losing their jobs in the public sector.”
Ravi Subramanian, regional secretary for trade union Unison, said: “Thousands of hard-working council staff are going to lose their jobs, it is going to have a devastating impact on many services which will close and do further damage to the local economy on the day that unemployment in Birmingham hit 12.9 per cent.”