The leader of Birmingham City Council has admitted the council took “too long” to implement recommended improvements to its corporate culture, partly causing the authority to rely on financial reserves to balance its budget.
Ian Ward (Lab) was responding to a report released by the government-appointed Birmingham Independent Improvement Panel (BIIP) on Friday. In a statement, the panel said Birmingham’s new political and managerial leadership acknowledged it had ”not until recently sufficiently gripped the improvement challenge” and had not ”yet fully aligned its revenue expenditure with the available resources and consequently… using substantial reserves each year since 2015-16 to balance its budget”.
The panel said Birmingham had agreed to take a ”collaborative approach” with the Ministry of Housing, Communities & Local Government to implement long-term reform of the council’s leadership, governance and management reform. The stocktake report also recommends setting up a financial plan that can ensure “long-term viability” with evidence that it is being implemented successfully.
In a letter to the communities and housing secretary, Cllr Ward admitted the council had “not sufficiently gripped” the recommendations set out in a 2014 report by Lord Kerslake (Crossbench) into the council, adding that “difficult decisions” would now have to be made.
Lord Kerslake’s independent review of the council called for a systemic change to the council’s culture, finding that it had “too often swept deep rooted problems under the carpet rather than addressed them”.
“The Improvement Stocktake Report is a detailed and honest look at where we are in our improvement journey, what has been achieved and what work is still needed,” Cllr Ward said in a statement.
“The first lesson I would take from the fact that BIIP has been in place a long time, too long really… and we need to get on and do this. We have got to do the work that enables them to have the confidence in this organisation.”
The update report was published alongside a Corporate Governance Improvement Plan, which contains proposals to reduce the use of reserves. According to the report, the council exceeded its planned use of reserves by 35% in 2017-18, spending £63.1m to deliver a balanced budget against a planned use of only £46.6m.
Speaking at a joint meeting on the BIIP’s findings on 21 June, Clive Heaphy, Birmingham’s chief finance officer, told attendees the council faced the same difficulties and proportionate level of cuts as other councils, but had addressed the need to modernise ”much later than most other authorities”.
It was also noted at the meeting that the “very substantial” use of reserves to balance the revenue budget since 2015-16 was “unsustainable”, while the council would have to form “robust plans for 2019-20” due to the assumption that “no further reserves will be used to support that year’s budget”.