Birmingham’s financial situation is worse than previously believed, according to a new report.

Birmingham City Council

There have been warnings of further cuts in Birmingham city council’s spending plans following a new report into the council’s financial position. A budget monitoring report to Cabinet due on July 16th has revealed at least a £21million black hole inherited by the new Labour-led administration as a result of previously-proposed savings which were not implemented.

The figure covers the first two months of the current financial year, which runs from April 2012 to March 2013. As part of the council’s commitment to transparency and openness, the report clearly details the challenges faced by the council as part of the legacy left by the former Conservative- Lib Dem coalition which ran the city prior to May’s local elections.

Council deputy leader Cllr Ian Ward said: “We feel it is important that the public know exactly where we are with the budget cuts that were implemented without solid plans for how they could be achieved. It is now up to the new Labour-led council to plug holes it did not create. We will do our best but this is a massive challenge – further black holes could very easily appear as the year progresses.

“The remainder of the year will undoubtedly be difficult, but to protect the interests of the most vulnerable in the city, we will do all we can to ensure measures are put in place that cause the minimum impact possible to the services we deliver and the quality of life enjoyed in Birmingham.”