Council warns of services cuts

A leading council has warned that it will have to "decommission" a number of its services to make huge spending cuts because of a multimillion-pound reduction in its grant from the Government.

Birmingham City Council said its grant is to be slashed by £52 million next year, although the situation could be worse.

The Labour-controlled authority accused the coalition of introducing "significant levels of uncertainty and instability" at a late stage in its planning cycle.

Over a six-year period from 2010/11, the authority said its grant from central Government is forecast to be cut by £332 million, but it will have to make savings of more than £600 million, almost half its spending.

The authority said: "We will need to fund unavoidable cost increases due to the effects of inflation, the changing basic needs of our population, changes in legislation and financing costs.

"These are expected to cost £273 million extra by the end of 2016/17, meaning that we will have to make savings of over £600 million or more by that time - that's around 48% of the total spending over which the council has control."

The council said it had already implemented a substantial savings plan, which had resulted in thousands of job losses.

Its statement added: "By 2012/13 we will have delivered £275 million of general fund savings with another £200 million across the next two years followed with a further cut in excess of £100 million over the following two years.

"The council has reached a point where efficiency and transformational savings are becoming even more difficult but there is still a need to significantly reduce expenditure further in order to operate within the constraints of the Government cuts and meet the rising social demand created through unemployment, skills shortage and housing needs.

"The extent of the future financial challenge facing Birmingham will change the landscape of local government not only in Birmingham but nationally - we will have to decommission a number of services."