Public services face yet more cuts after David Cameron warned of “momentous” spending reductions which will “affect every single person in our country”.
Spending on police and housing has already been cut in the West Midlands, and last week the Government announced it was closing the Birmingham-based General Teaching Council, which employs 150 people in the city.
But the Prime Minister said there was far more pain to come, as he revealed Britain was £770 billion in debt - and was set to pay £70 billion every year in interest alone, more than the schools and transport budgets combined, unless spending was cut.
In a hard-hitting speech designed to pave the way for unpopular decisions, Mr Cameron blamed Labour for the state of the public finances and argued that failing to cut the deficit would lead to “a steady, painful erosion of confidence in our economy.”
He warned: “If that were to happen, there would be no proper growth, there would be no real recovery, there would be no substantial new jobs – Britain’s economy would begin an inevitable slide into decline.”
But he was condemned by city Labour MP Khalid Mahmood (Lab Perry Barr), who said: “We all understand that the deficit needs to be reduced but David Cameron’s proposals will hurt the economy by cutting some of the jobs and services that drive it.”
One of the first decisions by the coalition government was to announce spending cuts of £6.2 billion.
This included cutting spending for West Midlands police by £7 million.
Government subsidises for a number of housing schemes have been suspended, including £3.6 million for 115 new homes on the former MG Rover site in Longbridge.
Education quangos including the General Teaching Council are to be axed. The closure of the Qualifications and Curriculum Development Agency and schools technology agency Becta, both in Coventry, could cost another 830 jobs.
But Mr Cameron’s comments suggest the cuts so far will be a small taste of what is to come.
The Government will set out how it plans to reduce the deficit in the emergency Budget on June 22.
Ambitious plans to build or refurbish every secondary school in Birmingham also appear set to be scrapped after Schools Secretary Michael Gove warned that money had been wasted on consultants.
He said the Government was reviewing the Building Schools for the Future Programme, which was set to cost £2.4 billion in the city.
The previous government had set out plans to rebuild every secondary school in Britain in 2003, but work has begun on just 11 schools in Birmingham.
It means more than 60 are still waiting - including some which have drawn up detailed plans but have not yet signed contracts with developers.
Some neighbouring authorities are also set to miss out.
Solihull has been a big winner and five re-built secondary schools have opened in the borough, while Sandwell has begun building work on five schools.
However, Wolverhampton’s £300 million deal with developer Carillion to rebuild 26 schools, agreed on May 4 just before polling day, may be subject to a review, while other authorities such as Dudley may never have the chance to take advantage of the scheme.
Mr Gove said: “A significant amount of the cash that was devoted to Building Schools for the Future was spent on consultancy and other costs, which did not contribute directly to raising standards, nor to employing a single builder or plasterer.”