The managing director of Birmingham City Council has delivered a cautiously hopeful message to residents, stating that the most severe problems which pushed the authority into effective bankruptcy have now been addressed.
From Bankruptcy to a Path of Recovery
Joanne Roney, who took up the role of managing director in September 2024, addressed councillors at a finance meeting this week. She reflected on the council's turbulent two-year journey since it declared itself unable to balance its books in September 2023. The crisis was triggered by a combination of factors including the massive equal pay liability, a disastrous new IT system rollout, poor budget setting, and soaring demand for services.
Labour councillors have consistently pointed to funding cuts under previous Conservative governments as a contributing factor. The aftermath saw deep cuts to local services, significant council tax increases, and a programme of property sales to raise essential funds.
Commissioners Acknowledge Progress Amid Ongoing Risks
Government-appointed commissioners, installed to oversee the council's recovery, provided their latest assessment. While they warned the authority remains 'financially fragile' and faces ongoing risks like the bins strike and equal pay, they also noted clear improvements.
Their report praised the "determination and resilience" of the political leadership and recorded that progress was being made. They highlighted enhanced resilience and improved performance in areas such as housing and children's services. A crucial framework agreement on equal pay has also been reached.
"I think the [commissioners'] letter is a fair reflection of the progress we've made," Ms Roney stated. "There is clearly more to do, there is no complacency here. But I would like to note some of those catastrophic issues that needed to be resolved have been tackled."
Aiming for a 'World Leading' Future
Ms Roney expressed confidence that the council is building a stronger foundation for the future. She pointed to the new financial system implemented this year as a key tool for accelerating improvements.
"We have got the equal pay agreement in place and we have started the work around not only service transformation but also council-wide transformation," she explained. "I remember this council of old where it was world leading. There's no reason why we shouldn't get back to that position – that's not going to happen overnight."
On finances, the council reported last month that its projected budget gap for 2026-27 had reduced from £83 million to £1.7 million, and from £127 million to £10 million for 2027-28. Council leader John Cotton has also welcomed the government's multi-year settlement as a vital cash boost.
However, the commissioners cautioned that the scale of the challenge remains "immense," with transformational savings still lacking. Council leader Cotton echoed this, stating the organisation had "turned a corner" but acknowledging, "There is still much to do before we become a well-run council that delivers good services."
