William Eichler 26 March 2019

Birmingham CC receives third warning of ‘financial mismanagement’

Birmingham CC receives third warning of ‘financial mismanagement’ image

Birmingham City Council has defended its financial record after receiving its third auditor warning in four years.

The council has been issued a section 24 notice under the Local Audit and Accountability Act, which acts as a warning of financial mismanagement.

Birmingham CC was issued a section 24 last September after it was revealed that it faced a funding deficit of £84m for the Commonwealth Games.

The council argues that it is working hard to put the authority on ‘a robust financial footing’, but adds that it is operating in the context of extensive Government cuts.

‘The savings plan for 2019/20 and beyond must be seen in the context of the city council having had its funding reduced by £690m since 2010 but we are confident that we can deliver these savings,’ said a council spokesperson.

The spokesperson said that the auditor’s report acknowledged that progress in the authority’s financial management had been made over the last year

‘The report also highlights “encouraging” progress in areas such as children’s services, workforce strategy, service improvements and a strengthened management team,’ they said.

The auditors made two statutory recommendations, one of which is related to the management of the council’s waste services following the conclusion of the long-running bin dispute.

In response, the council spokesperson said: ‘We acknowledge the impact on citizens and businesses of the recent industrial action in the waste service as well as the cost and the council remains committed to delivering improved waste services.’

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In competition with the PWLB

Christian Wall considers what alternative funding channels are available to local authorities beyond the Public Works Loan Board.
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