Birmingham City Council has managed to underspend on its budget after a year of dire financial warnings.
Despite the achievement critics accused the Labour -administration of using savings in adult social care to ‘prop up’ the failing waste service which overshot its own budget by millions of pounds following two costly industrial disputes in recent years.
Overall, in 2018/19 the council underspent on its £855.2m net revenue budget by £5.9m, an outturn report discussed by cabinet this morning revealed.
It also managed to reduce the amount of reserves used from an anticipated £30.5m to £20.6m.
That came in a 12-month period when £69m worth of cuts had to be made.
But opposition group leaders were quick to point out that adult social care and health came in £10.7m under budget, while waste management (in the Place directorate) came in £12.5m over, not including the £5.8m cost of this year’s strike.
He added: “Although you finished the year with a balanced budget, and in fact an underspend, you have these huge currents of finance underlying it which still pose massive questions and in particular for the public who are being asked to pay extra precepts for social care, to see social care services underspend and it is not being allowed to reinvest and improve social care is deeply concerning.”
Cllr Rob Alden ( Conservative group leader, Erdington ) echoed the point along with a number of other issues and questioned whether the budget set for this year (2019/20) was set on a ‘sustainable platform’.
Outgoing bins chief Cllr Brett O’Reilly (Lab, Longbridge and West Heath), who is to be replaced by Cllr John O’Shea (Lab, Acocks Green), offered some reassurance around the waste department.
He said: “There’s a much more collaborative approach now between politicians, officers and the unions in that service.
“I have every confidence that the foundations have been laid to improve it.”
While health and social care chief Cllr Paulette Hamilton (Lab, Holyhead) stated that the underspend in her portfolio was mainly down to reduced demand for care packages as well large funding sums being ploughed in to the department in recent years.
She said: “Please don’t think that because we have made a saving of £10.7m that this has been because everybody has been taking money off us, we have really being trying to rebalance how we spend the money in adult social care.”
Homes and neighbourhoods cabinet member Cllr Sharon Thompson (Lab, North Edgbaston) addressed the city’s growing homelessness problem, an area which was £2.5m overspent for the year.
She said the priority had been to drive down the number of people living in bed and breakfasts, particularly those based outside of the city, while work was ongoing to prevent people ending up homeless in the first place.
Home to school transport (travel assist) also overspent by £1.9m with the whole service having recently undergone a controversial policy review.
In the last 12 months, auditors have issued two section 24 notices to the council highlighting financial concerns, the most recent warning focusing on governance and the bin service.
Cllr Tristan Chatfield (Lab, Weoley and Selly Oak), finance and resources chief, declared the council was in a much more ‘stable’ financial position than in recent years but warned there was ‘no room for complacency’.
He added: “Whilst there are individual issues such as the waste dispute, home to school transport and homelessness that have caused overspends, there has been significant improvements across the vast bulk of day to day activities.
“Furthermore the work now being done by the finance directorate has improved both the consistency and standard of financial reporting across the organisation.
“This now means members should have greater confidence in the savings being delivered but also that future savings are realistic.”