Article by Cllr Dick Cole first published in Cornish Guardian newspaper (20th September 2023)

Birmingham City Council, one of the UK’s largest local authorities, is in financial trouble. It has issued a Section 114 notice, which means that the council can no longer “balance its budgets” and has to agree a plan with central government about its future. In the meantime, it will “put all new spending on hold, with the exception of protecting vulnerable people and statutory services.”

The magazine “Moneyweek” has documented some of the causes of the problems in Birmingham. These include “historic equal-pay claims by female employees – £700 million on top of £1.1 billion already paid out,” costly problems with a new IT system and the expense of the 2022 Commonwealth Games. But this sits alongside the rising costs of providing services in a city with a growing population.

The seriousness of difficulties with local government finance are being obscured by party-political posturing. Numerous Conservatives lined up to criticize Labour-run Birmingham. This included the MP for East Devon, Simon Jupp, who was quick to state that “if Labour can’t run a council, they can’t be trusted with our country.”

But there is a further reality. Local government is underfunded and has suffered greatly because of massive cuts from 2010 onwards. Between 2010-2011 and 2019-2020, the income of Birmingham City Council fell by 17% and they had to make “savings” of £736 million. “Moneyweek” also records that, more widely, “between 2009-2010 and 2019-2020, central government grants were cut by 40% in real terms, far beyond the cuts that Whitehall had to endure.” There has been a recent uplift in funding, but too little to even commence repair work for the cuts of the last decade or so.

Local government funds are so squeezed that numerous councils are struggling. One newspaper has reported there are at least another six councils which “could be issuing Section 114 notices in the next year,” while the Special Interest Group of Municipal Authorities has suggested that this figure could be as high as 26. Some councils have got into difficulties because they have entered commercial ventures to raise funds to compensate for lost funding from grant sources.

And one authority increasingly in the news because of financial pressures is Conservative-run Devon County Council, which has published a report stating that there was a “material threat of a Section 114 notice.” Unsurprisingly, Tory MPs such as Simon Jupp have been less vocal about council problems immediately to the east of the Tamar.

Local councils (whether controlled by the Labour Party, the Conservatives or indeed other groups) need greater financial support from central government, and they need it urgently.