Birmingham City Council financial challenges - time to Reset

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Council's financial management praised in new CIPFA report

Published: Monday, 21st June 2021

Birmingham City Council's improvements in its financial management have been described as exemplary in a new report from the leading professional institute for local government finance.

An independent report from the Chartered Institute of Public Finance and Accountancy (CIPFA) is based on a review of financial management capability against CIPFA’s five-star model and ranked the city council as a three-star authority – up from the one-star rating awarded in 2019 and delivered a year ahead of schedule.

The latest review, carried out in April and May 2021, stated: “Over the last two years the core finance function at Birmingham has moved on from delivering the more traditional stewardship aspects of financial management that had evolved through keeping the operational services ‘safe’, ensuring that the organisation works within its approved financial targets, to a much more mature and dynamic supporting and enabling service that drives diffused financial management.

“In summary, Birmingham City Council has made great strides in addressing the issues that constrained overall financial management capability. We would conclude that this progression highlights a highly commendable response to issues arising from our April 2019 assessment.

“It would be our considered view that Birmingham City Council should be considered to be an exemplar in the transformation of financial management capability given the extent of improvement achieved over the last two years.”

The council’s previously-stated aim was to achieve a three-star rating by March 2022. In a double boost for the city's taxpayers, the rating comes in the same week it was confirmed the council achieved a balanced budget last year, despite the challenge of the Coronavirus pandemic.

Cllr Ian Ward, Leader of Birmingham City Council, said: “Over the last decade we have had to deal with years of austerity and uncertainty, but in more recent times, thanks to a renewed focus and effort from all involved at the council, we have begun putting in place firm financial foundations.

“The unprecedented circumstances of the last 18 months could have easily knocked us off course, but it is greatly encouraging to hear from the highly-respected source of CIPFA that we are doing things in the right way for the citizens of Birmingham, who fund the services and activities we provide on behalf of the people of the city.

“We are realistic – we are still on a long road to recovery from the financial impact of COVID, but, as recognised by CIPFA, we will keep a very sharp focus on budgets and continue making our case to Government for every penny of help this city needs in the months and years ahead.”

Three stars is a significant improvement on the previous one-star score received from CIPFA in July 2019, which indicated the council was only at the basic ‘securing stewardship’ level. A full report detailing CIPFA's findings is due before the council Cabinet on June 29 - along with an outturn report on the council's balanced budget for last year.

Cllr Tristan Chatfield, Cabinet Member for Finance and Resources, added: “As guardians of the public purse, we have to make every penny count when improving the lives of people in all parts of Birmingham.

“As we emerge from the pandemic, there is much for the city to be optimistic about, with many opportunities arising from the likes of HS2 and the Commonwealth Games.

“This will be underpinned by sound financial management, and we stand ready to build on the progress that we are grateful CIPFA has witnessed and acknowledged, with an ambition to add to our three stars.”

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