West Midlands Combined Authority Eliminates £120 Million Budget Deficit
Delighted finance bosses have confirmed that a massive budget black hole facing the West Midlands Combined Authority in the coming year has been completely plugged. Members of the WMCA Board were informed that a projected revenue deficit of nearly £120 million for the 2026/27 financial year has been reduced to zero without requiring a Mayoral precept on people's council taxes or implementing cuts to transport budgets.
Inherited Financial Challenge
Mayor Richard Parker stated he inherited this challenging financial situation when he was elected in May 2024. He recalled examining seven or eight years of transport funding reports to understand exactly why the deficit had materialized and why it hadn't been addressed structurally in previous years. Parker expressed particular concern that past administrations had addressed annual deficits in an ad-hoc, short-term manner without fixing the underlying structural problems causing those deficits.
Strategic Financial Management
Back in November, the board learned that serious measures had been implemented, including generating efficiencies and using flexibilities to transfer capital funding to revenue to help claw back the deficit. A report by Chief Finance Officer Claire Nye detailed: "The funding gap (£119.8m) for 2026/27 has been fully closed and reduced to nil, with further reductions of £95.8m to £33.7m in 2027/28 and £105.2m to £29.1m in the following year."
Collaborative Resolution Approach
At the meeting, Mayor Parker emphasized his commitment to fiscal responsibility and transparency in managing the Combined Authority's finances. He highlighted the collaborative approach taken to resolve the issues, involving open conversations about available options and strategic approaches. Parker specifically noted his pleasure that the budget situation was achieved without requiring a Mayoral precept increase, which he had campaigned against and never intended to implement.
Preserving Essential Services
The Mayor expressed particular satisfaction that the deficit resolution didn't necessitate cutting transport funding or reducing support for bus services across the region. He acknowledged that when he took office, such measures had been presented as necessary options for resolving the deficits. Parker credited the financial team led by Claire Nye and all board members for their support in achieving this outcome through service preservation rather than tax increases.
Moving Forward with Stability
Parker characterized the achievement as demonstrating serious leadership that addresses problems directly rather than avoiding them. He stated that the previous administration left him with a £120 million financial hole that has now been repaired, allowing the region to move forward with greater confidence and the financial stability it requires for future development and service provision.
