Update on our budget situation
Birmingham City Council Chief Executive, Stephen Hughes, writes to all 26,000 council-based, non-schools staff in relation to the forthcoming budget consultation:
Dear colleagues
Council’s Budget situation
As many of you may be aware, the Cabinet, Scrutiny Chairmen and Regulatory Committee Chairmen met with Senior Officers of the Council on 18 and 19 November to discuss the Council’s approach to its budget for the next four years. I thought you might find it helpful to have some initial feedback from those meetings and some information on what happens next.
We began by updating Members about the impact of the Government’s Comprehensive Spending Review (CSR) on the Council’s finances. Our current estimate of the total savings required over the next four years is now a bit lower than the £330m figure I previously told you about. But, in addition, the Government has decided to “frontload” the savings required by local government, which means that more than half the total savings have to be made in the first year, 2011/12. However, we still don’t know the exact figures for Birmingham. There will be some greater clarity on 2 December when the Government announces the Revenue Support Grant Settlement for 2011/12 and subsequent years. We hope then to also know the details of other specific grants, but announcements on these may be delayed.
Nevertheless, the overall position is clear enough for Members to recognise we have a difficult financial situation to deal with. They also understand and support the need for Birmingham City Council to do its part in helping to reduce the financial deficit that the country has to deal with, and the importance of doing that to secure the financial stability and future growth of the UK.
Each of the Strategic Directors gave a presentation on the way in which their services needed to be re-designed and re-structured in order to best mitigate the impact on the public in general and our most vulnerable service users in particular. Whilst there were some matters of detail which Members wanted to change, in general they agreed that the proposed solutions were the ones to take forward notwithstanding the difficult decisions they would eventually have to take.
In consequence, elected Members have supported the need to start widespread and detailed consultation on these proposals, with all Councillors, staff and employee representations, service users, suppliers and the general public and business. This will happen in a number of different ways, specifically:
- An overall view of the financial situation, the proposed approach and a summary of Directorate changes is being prepared and will be widely disseminated probably early next week.
- Each Strategic Director will put in place detailed consultation arrangements with staff, service users and suppliers. Senior Managers will be briefed shortly and asked to cascade information to all other staff.
- A special edition of “Forward” is being commissioned to supplement information being provided through the electronic media, press and broadcasting so that every household in the city has the opportunity to contribute.
The proposals in their entirety will require a significant reduction in the workforce by a combination of natural wastage, early retirement and voluntary redundancy, transfer to other organisation structures and, as a last resort, by compulsory redundancy. The impact of workforce reduction will be helped considerably if individual staff are prepared to leave the Council voluntarily and you will be aware of the current exercise designed to help this happen.
Because of the risk of redundancies we will begin statutory consultation under employment law with the Trade Unions next week in order that Members are able to take into account all responses to consultation, whether statutory or otherwise, by the time they have to make final decisions at the Council meeting on 1 March 2011, when the budget for 2011/12 will receive full and final consideration.
Within the next week or so you will have much greater information about how our future budget is likely to affect you. I believe it is important that staff are told as soon as possible what the shape of the changes are likely to be, both so that you can contribute to the consultation, and so that you can think about and begin to plan your own futures. I cannot pretend that this is anything but difficult and painful. But I admire your dedication and commitment to Birmingham and I know that despite these changes I will be able to count on a continued professional and caring approach to the delivery of services. I am proud of you all and so should all of Birmingham.
Yours faithfully
Stephen Hughes (Chief Executive)
