Birmingham’s political sands are beginning to shift decisively, and not simply as a result of the Government’s unprecedented spending squeeze, the impact of which is likely to dent the appeal of the city council’s Conservative-Liberal Democrat coalition.

The Lib Dem half of the partnership was wise enough to caution upon taking power six years ago that although the low tide of Labour’s popularity still had some way to go, the party’s fortunes would recover eventually. And in a predominantly working class city with the make-up of Birmingham, the natural order of Labour control would return one day.

That day may be approaching rather more quickly than the coalition would like. This year’s council elections saw Labour beginning to pick up some of the seats it lost during its wilderness years, and with national opinion polls moving against the Conservatives and Liberal Democrats, further inroads into the coalition’s strength can be predicted at next May’s polls.

It remains to be seen whether opposition Labour leader Sir Albert Bore’s forecast that he will get behind his old desk as leader of the council again in 2012 is any more than bravado. But in ending a long period of relative silence, the old campaigner will have sent something of a shudder through the deeper thinkers among the coalition ranks.

As it happens, 2012 is also the year that Birmingham may choose a directly elected mayor – a post that Sir Albert is known to hanker after.

His intervention this week, putting senior council officers “on notice” that Labour will reverse any attempt to roll back the council’s devolution programme upon taking power, has more than an element of showmanship about it. But the subject was chosen carefully, since the dismantling of constituency committees and the pulling back to the centre of service delivery is an area where differences between Conservative and Liberal Democrat councillors are at their greatest.

The next three months represent a time of acute danger for the coalition, which is struggling to find acceptable ways of identifying £330 million of budget reductions over the next four years. The biggest challenge for Tory council leader Mike Whitby is to win the war of ideas by firmly supporting chief executive Stephen Hughes who has shown with great patience why the normal approach of simply “salami slicing” services by cutting 28 per cent from each departmental budget will not work on this occasion.

The amount of money to be saved is so vast that a death-by-a-thousand-cuts approach would have disastrous results, and certainly propel Labour back into power for a generation. A more radical approach is required, off-loading functions that can be delivered more efficiently and cheaply by the private and voluntary sectors, shifting the council from a body that delivers to one that commissions services to be delivered by other people.

This is a big idea, but there are few signs at the moment that the political will for such radical change exists. It is even said that Coun Whitby has banned the use of the word “cuts”, which if true smacks of denial not leadership.