The draft Birmingham accounts for the year ended 31st March 2020 were presented to the city’s audit committee yesterday. The auditors have a duty to consider whether a council is providing good value for money with the public funds at its disposal. Two particularly serious instances where the Labour council failed in its duty to provide good value for money were presented to audit committee.
The Perry Barr Regeneration Scheme, which includes the athletes village for the Commonwealth Games (even though the council has been so slow, that it won’t be ready in time for the athletes to actually stay in it and are now having to use colleges and similar throughout the Midlands) has been controversial for a number of reasons. With costs increasing by £90m against an original budget of £493m, the auditors said “We have concluded that the projected cost overruns (more than 20% higher than the original planned cost) reported to Cabinet in March 2020, only nine months after the original ‘business case’ was approved, are demonstrative of inadequate financial planning in the development of the original ‘business case” and went on “ we have concluded that these matters are evidence of weaknesses in proper arrangements for understanding and using appropriate and reliable financial and performance information to support informed decision making and performance management.”
Cllr Meirion Jenkins, shadow cabinet member for finance and resources and member of the audit committee said " It is very disappointing that Labour controlled Birmingham has again failed to deliver value for money for Birmingham tax payers in a number of key areas. This has become a regular feature of our published accounts. We pay very high council tax in Birmingham, which Labour is constantly increasing, and it's easy to see why with such inept financial management. "
Cllr Jenkins added “All this means Birmingham tax payers are going to end up paying even more for an athletes’ village that won’t even house a single athlete.”
The auditors went on to report on the management of the highways contract, which is being tendered following an acrimonious break down with the original contractor Amey. The auditors said “At the end of the financial year it was confirmed that the affordability gap in the contract was significantly more than had initially been thought. During 2019/20, and until the scale of the affordability gap was confirmed, the Council was making significant decisions regarding this issue knowing that the extent of the full financial challenge … was uncertain” and went on “ we have concluded that these matters are evidence of weaknesses in proper arrangements for understanding and using appropriate and reliable financial and performance information to support informed decision making and performance management.”
Cllr Simon Morrall, another member of audit committee said “The auditor’s findings report into the highways contract could hardly be more damming and it’s a real shame that we had to go into a private session to discuss it. Since 2010 the government has given this council roughly £1 million a week for highways maintenance and yet the sheer level of mismanagement within this department has been frankly appalling, leaving roads unrepaired and in a terrible state. It’s clearly top management to blame and, while the council themselves admit that the Amey contract was working well up until 2014, it has since then been abysmal, leading to the contract being pulled all together and the clock is now ticking for a replacement. I do hope that once this happens, the full report can be made public, so that tax payers can see for themselves the dreadful state this department was allowed to get into.”
