The issuing of an S.114 notice by Birmingham City Council indicates that, due to the historical and ongoing situation around Equal Pay claims and liabilities, the local authority is currently unable to balance its budget and has declared itself in financial distress. This means the Council is obliged to cease all new spending, with the exception of spending required to fund statutory services and to safeguard vulnerable people.

We have been asked what this means for Council-funded voluntary sector services in the immediate and longer terms, but it is not possible to give a definitive answer at this stage. Our current understanding is that existing commitments and contracts will continue to be honoured, although recently-committed spend is likely to be reviewed. The Council’s leadership has indicated its intention to put in place a framework of controls whilst ensuring that key services to children and vulnerable people are not affected.

Not all Council-funded voluntary sector activities will be affected immediately (or at all) by this decision, so it’s important to continue with business as usual until the picture becomes clearer. We all no doubt share concerns about how things will develop in the future for the city and for Birmingham’s residents – many of whom are recipients of voluntary sector services. There is of course the possibility of knock-on pressures in the system as public spending priorities shift.

Our advice to those organisations whose work is funded by the Council and who are concerned by today’s announcement is that they should liaise with their Council commissioners around any likely implications for current and future budgets. It would also be prudent – as always – to review future income streams and any Council-funded work that’s in the pipeline, in order to model and plan for different eventualities.

The Council will, necessarily, be looking for as many ways as possible to help it move out of these financial difficulties and into greater stability. We must remain focused on articulating the essential role the city's voluntary sector plays, both in providing cost-effective solutions to social and financial challenges, and in delivering essential services to vulnerable people during times of crisis. We have always been at our strongest and most effective when we have pulled together with each other and with our public sector partners in pursuit of the common cause of better outcomes for the people we all serve.

BVSC will continue to liaise with Birmingham City Council as this matter develops, and we will update you as we learn more.

Chief Executive
Birmingham Voluntary Service Council

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