Monday, 21 October 2013
WHY CUTS ARE BEING MADE
A number of resident are asking me why there are so many cuts being made in various services through out the ward. The answer is not that difficult to understand.
Birmingham City Council is facing an extremely tough financial challenge.
In 2010, as part of the Spending Review, the government announced its plan for reducing the national financial deficit with further announcements as part of the 2012 Autumn Statement and March 2013 budget. Funding to local authorities will be reduced by at least 28% from 2011 to 2015 after taking account of inflation and, in fact, some grants have been stopped altogether. Some large cities, including Birmingham, have been hit hard.
In the last two years, the Government has reduced its grants to Birmingham City Council by over £140m. That is a reduction of 14%.
For 2013/14 general grants have been cut by a further £27m. Over a six-year period, from 2010/11 to 2016/17, it is forecast that the general Government grants to Birmingham City Council will reduce by at least £300m.
At the same time, the council has to pay for unavoidable cost increases due to inflation, changes in legislation, the changing needs of local people and financing costs. These are expected to cost at least £315m extra by the end of 2016/17.
Based on information available at the time of setting the Council’s budget for 2013/14 the combined impact of grant reduction and rising local costs means the council will have to make cuts of around £615m by 2016/17.
The task for 2013/14 is to save around £102m in addition to the £275m saved in the previous two years.
Sadly It is clear from this a lot have cuts have been made and without a U turn from the government many more cuts will follow.