Martin Mullaney was a LibDeb councillor until last May. He’s waging a campaign against the Labour administration’s claim that Birmingham finances were found to have a £21m hole in them when they came to power. He writes….
Birmingham City Council House
In part 1 of my investigation into the truth behind the Labour administration for Birmingham City Council claims of a £21million ‘black hole’ I showed the following:
a) The claimed “£21million black hole” is really a budgetary pressure.
b) That a £21million budgetary pressure at month 2 in Birmingham City Councils budget is nothing unusual.
c) That similar budgetary pressures have existed in month 2 in Birmingham City Councils budget and the previous administration has reduced these down to zero by month 12.
d) The new Labour administration is withholding from public scrutiny the end-of-year accounts for 2011/12. These are always made public at the end of June.
For this blog, I want to look a bit more closely at the budgetary pressures that the previous Conservative-Liberal Democrat administration inherited in June 2004 from Labour.
The below table shows the budgetary pressures for each month during the 2004/5 municipal year.
| Month in Financial year 2004/5 | Date the Cabinet report was presented | Month 2 revenue financial pressure (£millions) |
|
Month 2 |
Not reported |
|
|
Month 3 |
13/09/2004 |
21.9 |
|
Month 4 |
27/09/2004 |
27.2 |
|
Month 5 |
25/10/2004 |
31.8 |
|
Month 6 |
29/11/2004 (revised20/12/2004) |
22.5 |
|
Month 7 |
17/1/2005 |
21.7 |
|
Month 8 |
28/2/2005 |
8.7 |
|
Month 9 |
4/4/2005 |
8.5 |
Note that months 1, 10 and 11 are normally not reported. Month 12 is the end of accounts.
As you will see above, the financial pressure for 2004/5 reached a peak of £31.8million in month 5. The increase in predicted overspend was due to a Social Services department that was massively overspending. By the end of the year the account show that this had been reduced this to an underspend of £4.8million – this was done by careful budget monitoring and identifying where the Council budget was being overspent.
If you take into account inflation, the £31.8million budgetary pressure in month 5 2004, is worth £39.4million in today’s money
For Councillor Sir Albert Bore to complain about a £21m budgetary pressure in month 2 is complete nonsense. The previous administration inherited a £39.4m (in 2012 values) budgetary pressure from his administration. The previous administration dealt with it and reduced it to an underspend by the end of the year.
