Conservative and Liberal Democrat politicians running Birmingham have finally sprung to the defence of a city council budget that sets out plans for a £75 million savings package and raises the possibility of up to 2,000 local authority jobs disappearing.
But cabinet members were far too late in reacting.
By the time Tory council leader Mike Whitby issued a forceful “we’re not panicking” plea at a cabinet meeting, details of the financial morass had been in the public domain for almost a week.
Five days before the cabinet meeting, council chief executive Stephen Hughes and resources director Paul Dransfield briefed journalists on the proposals.
Coun Whitby and his colleagues decided to take no part in the briefing and did not make themselves available for questions.
They could only watch in horror as newspapers, radio and television stations helped themselves to doom-laden predictions about the parlous state of the council finances.
Cabinet members feel the budget has been misrepresented, relying on the fact that the paperwork mentions up to 2,000 “funded posts” disappearing.
This is not the same thing as 2,000 people being sacked, according to Coun Whitby.
He told a cabinet meeting that the figure “does not necessarily equate to job losses”.
Some of the posts would be cut by getting rid of private sector agency staff working for the council on a fixed-term basis.
He insisted his administration was doing its best for Birmingham people during the worst economic recession since 1921.
This year’s council tax increase will be 1.9 per cent, for the fifth successive year. The below-inflation rises since 2005 have saved householders £100 compared with the average increase for England.
Coun Whitby (Con Harborne) added: “It is not a case of panicking, there is no gaping hole in our budget.”
Latest forecasts predict the council will be £14.3 million in the red at the end of the financial year. And that is after emergency funding of £16 million from the city’s reserves and £14 million from the government’s Working Neighbourhoods Fund was used to bail out the finances.
CIPFA, the Chartered Institute for Public Finance Accountancy, has estimated that a government public spending squeeze may leave the council £150 million short of the money it needs to deliver services over the next decade. But Coun Whitby described a prediction that 5,000 council jobs might have to be sacrificed as a “crude estimate”.
Cabinet members weighed in with similar sentiments, in a dress rehearsal for next week’s budget-fixing meeting.
Alan Rudge, the cabinet member for human resources, said claims that 2,000 people might be made redundant were “scaremongering”.
Opposition Labour group leader Sir Albert Bore accused the Tory-Lib Dem coalition of “financial carelessness”.
Sir Albert (Lab Ladywood) added: “This budget is not about savings and efficiencies, it’s about real cuts in services and job losses and the citizens of Birmingham will have to bear the brunt of it.”
One-fifth of the council’s annual budget is being used to pay off interest on loans taken out for expensive building projects including the new library.