A £49m budget overspend by Birmingham City Council will mean balancing the books next year will be a ‘mammoth’ task, its improvement panel have warned.

The Birmingham Independent Improvement Panel said the serious overspend for 2016/17 was a result of ‘flawed planning and insufficient delivery’ of the council’s revenue budget

In a letter to local government minister Sajid Javid, the panel said: ‘We report that flawed planning and insufficient delivery of the council’s 2016/17 revenue budget will result in a serious overspend for the year.

'As a consequence the council faces a mammoth task to prepare a balanced budget for2017/18 and, as the council has very limited general reserves available, this potentially places at risk its future success.

‘The council understands that long-term financial stability will be achieved only by delivering a highly ambitious transformation agenda. If this is to be successful the council must simultaneously make significant savings, invest in new ways of operating and develop an organisational culture that is fit for purpose.’

The panel did highlight the progress being carried out by the council since its last update in April, including actively addressing the concerns raised by the Kerslake Review and appointing four assistant council leaders to drive change.

Chief executive of the council, Mark Rogers, said: ‘The continuing and profound reductions to local government funding mean that the budget setting process has become increasingly challenging.

The panel is correct in describing the setting of the 2017/18 budget as a “mammoth task” and it is one that we are not going to shy away from. We are equally determined to continue the wider work to improve ourselves and will not lose sight of our responsibilities to improve safeguarding and education services.’