Exclusive: Birmingham Council leader reveals strategies for financial recovery in Express & Star interview

That's the assessment of Birmingham Council's leader John Cotton as he addressed the pressing issue of financial challenges.

Councillor Cotton was a guest at a lunch hosted by investment firm Richardson at its Oldbury headquarters.

With Birmingham facing cuts of around £300 million, similar scenarios in other regions like Shropshire, and warning signs at certain councils in the Black Country, the situation demands urgent attention.

As you would expect, Councillor Cotton attributed these challenges to 14 years of austerity and cuts in local government funding.

The reduction in funding, coupled with rising demand for services, has placed immense strain on councils nationwide, Councillor Cotton told the Express & Star in an exclusive interview after the event.

"The root cause has been 14 years of austerity and cuts to local government funding," he said.

"We've seen across the country, I think it's a 40 per cent reduction in funding to English councils for that period - 2010 to 2020.

"For Birmingham, that's meant we've lost the equivalent of a billion pounds, and clearly at the same time as we've seen that reduction in funding, we've seen a rise in demand for services.

"People fall into crisis with the mounting housing problems that we have in this country and the rising demand for adult social care, which is a system that's been significant crisis for some time, and still remains unfixed.

"And all of this is driving councils, either towards the cliff edge or over that cliff edge," he continued.

Birmingham has lost the equivalent of a billion pounds in funding, according to Councillor Cotton, exacerbating crises in areas such as housing and adult social care.

To navigate these difficulties, he emphasised the need for a frank conversation about the role and function of local government.

He says that while local authorities play a crucial role in shaping communities and delivering vital services, sustained underfunding and unfair allocation of funds have hindered their ability to address pressing issues like deprivation and unemployment.

"I think we do need that conversation about the role and function of local government," said Councillor Cotton.

"Local government plays such an incredibly powerful role in shaping communities and in delivering vital services that people rely upon.

"Also helping to, as we've sought to do Birmingham, attracting investments and creating opportunities for businesses to grow and thrive, so that's a key role for local government" he continued.

"But we cannot continue with a situation where we've got this serious underfunding, and also the serious unfairness in how funding has been allocated over a number of years, which has directly impacted large urban areas like Birmingham, where we have significant challenges around deprivation, on employment, child poverty, and so forth.

"So we do need this national conversation about how we're going to sustainably fund local government so it can perform those absolutely vital duties for the communities it serves."

When we asked about the possibility of improved funding under a Labour government, Councillor Cotton acknowledged the challenges but expressed optimism about a more positive partnership.

He also highlighted the need for longer-term funding commitments to enable better planning and budgeting, a stark departure from the current annual funding settlements.

"I don't underestimate the challenges that any incoming Labour government is going to face because they would be taking over the most ghastly economic situation, not least because the last Prime Minister crashed the economy," he said.

"But it's also really clear that there will be a more positive partnership between a Labour government and local councils than we've certainly had with the current government."

Looking forward, Councillor Cotton underscored the importance of collaboration with local businesses to re-shape the council and drive economic growth.

Initiatives like "Shaping Birmingham's Future Together" aim to engage stakeholders in conversations about the city's future.

Additionally, he says partnerships with universities and private sector entities, such as the Birmingham Innovation Quarter, demonstrate a commitment to innovative economic development strategies.

In terms of job creation, Councillor Cotton highlighted growth opportunities in creative industries and professional services. Investments in sectors like media production and financial services signal confidence in Birmingham's future.

However, Councillor Cotton emphasised the need for inclusive growth to ensure all residents benefit from economic opportunities and address disparities in child poverty and unemployment.

"We're in a fortunate position that we have a pretty vibrant economic scene in the city," he told the Express and Star.

"Clearly there is real growth around that creative industries. We've seen really innovative new creative businesses settled within in the city, big investments from the BBC in the form of the the Tea Factory, and also Steven Knight's studios in Digbeth as well.

"We've also seen serious investment from professional services organisations into the city now, many of them relocating to Birmingham, which I think is a real vote of confidence in Birmingham future.

"So that's what we've got to do - those jobs and opportunities we've grown to ensure that all parts of the city can share in that and be able to access those jobs.

"We've got to end this tale of two cities where on one hand we have record levels of investment coming in, but also we've still got serious issues around child poverty and unemployment, but we can use the growth that's coming in city to help address that."

Councillor Cotton's vision for Birmingham entails a multifaceted approach that prioritises collaboration, innovation, and inclusive growth.

By leveraging partnerships with the private sector and focusing on key growth sectors, Birmingham aims to overcome its financial challenges and build a prosperous future for its residents.

It remains to be seen if this vision will become a reality.