The problems facing Birmingham's inner cities remain as acute as ever.

Some of the poorest wards in Britain are to be found here. Indeed, some of the poorest people in Europe live in Birmingham.

Earlier this week, a Department of Health report highlighted some of the results of poverty - a lower life expectancy and a greater chance of contracting a serious medical condition such as cancer.

There are many achievements, of course, such as the dramatic improvement in education standards in recent years and the regeneration of the city centre over a longer period.

There is usually little to be gained by dwelling on the negative, but it is important to remember that real problems do still exist.

It is the level of need which makes the mismanagement within Druids Heath Tenant Management Cooperative such a betrayal.

It had a £2.5 million annual budget and was responsible for running 1,700 local authority houses.

But an Ombudsman's report found numerous irregularities, including the practice of creating unnecessary highly-paid posts which could then be awarded to friends and family of the trust board.

It also warned that the city council had been guilty of years of maladministration by failing to monitor the trust's affairs properly.

One of the roles of the city council, as well as local MPs and bodies such as the regional development agency, is to lobby for more resources for the city.

Indeed, although there may be more that could be done, Birmingham does receive significant funding for projects designed to reduce deprivation.

But when large amounts of money are provided by the state, the risk that some of it will be misspent increases.

This means that significant public funding must always be accompanied by detailed scrutiny. That doesn't seem to have happened in this case.

But while significant mistakes were clearly made, it would be a pity if the local authority gave up on the idea of devolution.

Druids Heath was supposed to be a shining example of the benefits of devolving power to neighbourhood level.

It didn't work, but that doesn't change the fact that local people may be better judges than council officials of what their communities need.

It does illustrate the importance of maintaining professional oversight of every penny of taxpayer's money that is spent.