Review of social work teams among £370m in savings plans set out by Birmingham

Birmingham council is reviewing its adult social work teams with a view to saving £3.7m over the next two years as part of moves to balance its budget by 2026.

The measure is a small part of a £367m savings package from 2024-26 approved by the authority’s cabinet yesterday, and due to go to the full council on 5 March for final sign-off.

The authority is also planning to save £16m from adult social care packages and £19m through reductions in its contract with Birmingham Children’s Trust, which delivers children’s social care in the city.

Council’s dire financial situation

The plan is the council’s response to the dire financial situation that forced it to issue two section 114 notices in September 2023, declaring its inability to balance its budget, as required.

The situation was triggered by the council facing an equal pay liability of £760m, due to discriminatory pay practices, though subsequent investigation revealed “significant structural issues” in its finances.

In response, levelling up secretary Michael Gove sent in commissioners to oversee the running of the council, including its financial management, and they subsequently instructed the authority to balance its budget by 2026.

Gove has allowed the authority to raise council tax by 9.99% in each of the next two years – double the usual permitted amount – and agreed a £1.255bn in “exceptional financial support” to enable the council to balance its budget in 2024-25.

This will enable the council to use the sale of assets or borrowing to fund day-to-day expenditure, contrary to the normal accounting rules. It applies to spending dating from 2020-21 to 2024-25.

Social care spending to rise despite savings

Due to demand and inflationary pressures, spending on both adult social care and children’s services will increase year on year, despite the council’s savings plans.

In adult social care, the authority is planning to increase its base budget from £426.4m in 2023-24 to £475.8m in 2024-25 and £489.9m, reliant on making savings of £23.7m in 2023-24 and £52.9m in 2024-25.

The biggest savings item, worth £5.7m in 2024-25 and £10.2m in 2025-26, is a plan to “review care packages to reflect a strength-based approach whilst still meeting assessed needs”.

The council said it envisaged “maximising the offer of the third sector, reducing reliance on traditional home care by the use of equipment and technology-enabled care and reviewing the provision to young people as they transition from children’s to adults’ services”.

Review of social work teams

It has also pencilled in £1.5m in 2024-25 and £2.2m in 2025-26 from a “review of social work teams” designed to “improve efficiencies” and “reduce vacancies”.

It is not clear what this will mean for existing social workers in adults’ services. Birmingham said it would only be able to provide further details of savings proposals after the full council had agreed the budget on 5 March.

Within children’s social care, funding for Birmingham Children’s Trust is due to rise from £245.8m in 2023-24 to £278.7m in 2024-25 and £284.9m in 2025-26, including due to increased care placement and social work staffing costs.

Contract reductions for children’s trust

However, this also comprises a £9m in savings from the trust’s contract in 2024-25, followed by a £10m reduction in 2025-26.

The council is also planning to end its direct funding of early help services – saving £8.4m a year – including provision it commissions from the trust.

Birmingham Children’s Trust’s chief executive, James Thomas, said it was having to make savings of £16.3m – 8% of its revenue – due to the council’s decisions.

Trust ‘minimising impact of cuts on services’

“We have worked hard to minimise the impact of these cuts on statutory services but inevitably there will be some service reductions,” he said.

“Through a range of measures including, for example, better use of grants, greater partnership contributions, and more effective cost control and commissioning measures for high-cost placements, we have been able to reduce the impact on frontline delivery to £2.1m, which is 1%.”

In relation to the council’s withdrawal of early help funding, Thomas said the trust had agreed to “step in and maintain as much of the funding…as possible” by making savings elsewhere.

Protection for early help services

He said this meant the trust would be able to maintain all of its existing targeted family support services and some – but not all – of the funding of voluntary and community organisations currently provided by the council.

“Whilst these services are non-statutory and, in effect, discretionary, we recognise that they are vital in preventing family crisis and the escalation of need to more expensive interventions,” Thomas added.

Despite the scale of the savings, Birmingham council still needs to find a further £67m to balance its budget in 2025-26.

Council ‘needs to do better on recruitment’

In a separate report to the cabinet, its commissioners, led by former local authority chief executive Max Caller, said they believed the budget was “deliverable”, but this required “major improvements in the arrangements for the delivery of savings”.

“There is also a real need to ensure council recruits, retains and invests in people with the right skills and knowledge to undertake this work,” they added.

“The council has made limited progress in this area and needs to do far more and at a far greater pace.”

Nationwide funding challenges

Despite the specific circumstances facing Birmingham, funding challenges are a nationwide problem for councils, according to two recent surveys.

About half of councils (51%) said they were likely to issue a section 114 notice in the next five years, with 9% saying they would do so in the next financial year, in response to a survey by think-tank the Local Government Information Unit (LGiU).

LGiU received responses from 128 authorities, including district councils, who do not have responsibility for social care.

Widespread pressures on social care

Among upper-tier authorities – those with social services responsibility – children’s services and education constituted the biggest short-term pressure, cited by 73% of respondents.

Over the long term, adult social care was seen as the biggest pressure, cited by 52% of upper-tier councils.

Separately, an Local Government Association survey found that 75% of upper-tier councils would have to make savings to adult social care and 69% to children’s services.

This was despite ministers finding an extra £500m for the two services beyond what it had already allocated, in the 2024-25 local government funding settlement.