Birmingham’s leaders have said that nothing is safe as the council faces having to cut £600 million off the budget over the next four years.
City leaders have said that all options are on the table with the only provisions the council must legally provide safe.
Labour leader Sir Albert Bore has painted a bleak picture, describing the crisis as meaning: “This is the end of local government as we know it.”
Fears are growing that this could lead to a mass outsourcing of services to private companies, and a ‘sale of the century’ of council assets on a grand scale.
Residents and businesses also face being targeted with huge increases in council tax on new homes, ‘bed tax’ on hotels and a host of other charges.
The first round, in the 2013/14 budget, will see a reduction of between £100 to £160 million, on top of £300 million worth already implemented in the last two years. 1,000 extra council jobs are also set to go. Sir Albert has refused to be drawn on where the axe will fall first, but said: “We have got to the end of the road when it comes to salami-slicing. We will now have to either stop or de-commission services.
“I’m not looking forward to this, but it is what we have got to do.”
A decade ago he was the leader who was blocked from transferring the council house stock to housing associations.
Answering a direct question about the future of the council’s 65,000 homes, he said: “The housing revenue account, that provides for the management of council homes, is separate from the General Fund that covers all other services provided by the council. My announcements refer to the cuts in services provided through the General Fund.”
There is further speculation that other services will be contracted out, including refuse collection, where savings could be made on staffing costs. But this would be met with stiff resistance from the unions.
Attempts to privatise the leisure centres or swimming pools, along the similar lines to the recent leasing out the formerly loss-making municipal golf courses or the deal done over Harborne swimming pool’s replacement.
But Sir Albert appeared to rule this out too saying: “I doubt that we will be considering some of the outsourcing that you’ve referred to although we have already taken forward outsourcing of some of the ancillary education services previously provided directly by the city council to our schools.”
The schools budget has already taken a major dent as more and more convert to Academies and become directly answerable to the Department for Education. The council must now convince head teachers to buy services if it wishes to maintain funding levels.
Sir Albert has stated that directors are being asked to look at all services which are non-statutory. Any which do not deliver on stated council aims such as ending deprivation and promoting social cohesion, promoting green and safe city or job creation, will be first in line for the chop.
The long term outlook is bleak if the government grant continues to shrink, and with costs and demand for adult and children’s social care rising it has been projected that even these essential services will be unaffordable in a few years’ time.
While there is much concern on the cost side, the Department for Local Government and Communities and opposition Tory and Liberal Democrat leaders all claimed more could be done on the revenue and charges side.
With council tax effectively capped at 1.6 per cent this year and a one per cent rise only able to raise £2.5 million it is unlikely that this can be used to boost income.
But the DCLG has highlighted payments linked to the City Deal, the New Homes Bonus which temporarily doubles the council tax take for new homes built and occupied, the £22 million Growing Place Fund and investment in various capital projects.
A spokesman said: “Given councils account for a quarter of all public spending, it is vital they continue to play their part in tackling the inherited budget deficit by making sensible savings through better procurement, greater transparency and sharing back offices.
“This year Birmingham had £2,576 to spend on each household to protect the front-line services people rely on, more than the English average of £2,186.”
Former deputy leader Lib Dem Paul Tilsley has called on Sir Albert to ‘be bold’ in seeking new funding.
A bed tax on hotel rooms to cover the costs of marketing and tourism, including subsidies for party conferences or other major events, is something both Couns Tilsley and Bore have previously promoted and could be again looked at under the Localism Act.
Coun Tilsley said: “They have got to take the opportunity and break out of the straight jacket of dependency on government funding. As far as cutting goes we should not be ruling anything in or out.”
Tory group leader Mike Whitby accused Labour of seeing ‘apocalyptic threats’ from budget cuts instead of ‘challenges’.
He argued that his administration, which ran the council until May this year, had already lined up many of the cutbacks. “We dealt with more than £300 million cuts in two years without closing libraries and swimming pools,” he said.
And added that the job loss figures were ‘scaremongering’ as many would be vacant posts, out sourced roles or voluntary redundancy. He said that ‘while it is always regrettable and devastating for people to lose their jobs’, his administration’s cut of 1,400 posts had resulted in 300 compulsory redundancies. Job losses and reduction are the focus
The unions are also likely to have a part to play in the Labour group’s deliberations, and there will be a concerted effort to defend jobs and terms and conditions.
Unison regional secretary Ravi Subramanian said: “This budget situation is very worrying and it is a mess jointly created by the previous Tory Lib-Dem council and the current Tory Lib-Dem Government.
“UNISON will be asking the Labour Council to campaign jointly with us to approach Eric Pickles and ask for a Fair Deal for Birmingham.”
He added that further job losses would harm any prospect of economy recovery and have a knock on effect on local businesses.
GMB unions said the cuts were a huge blow during the recession. Senior organiser Amanda Gearing said: “Vulnerable citizens in Birmingham cannot live with these cuts which even the Leader says will lead to front line services being ended.”