Birmingham city council to cut up to 2,000 jobs and close care homes

Britain’s largest local authority plans to shed up 2,000 jobs, freeze staff pay and reduce services in what is being seen as a foretaste of serious cuts to council budgets across the country.

Birmingham city council, which employs about 35,000 staff, has proposed the moves in an attempt to save £75m over the next year, cover losses in income and keep a lid on council taxes rises.

The crisis is understood to have been triggered by multi-million pound overspends in child protection and services for older people and adults with learning disabilities. The job losses are understood to be earmarked for areas such as adult social care, housing, libraries, sports centres, museums. Day centres and care homes for older people face closure.

The council chief executive, Stephen Hughes, said the financial challenges facing local authorities were even more dramatic than those seen under Margaret Thatcher in the early 1980s: “The scale of cuts is likely to be of a magnitude that no one has seen. My life in local government goes back to 1979 and there has never been anything as bad as this.”

The council leader, Mike Whitby, who heads a Conservative-Liberal Democrat coalition, said: “We are well aware that all the forecasts indicate the next few years will be tough for local government financially. Quite simply we have to do more for less.”

Unions and the Labour opposition accused him of overreaction. Dave Prentis, the general secretary of Unison, said: “This is a massive number of job cuts, and the council cannot be serious. It is absolutely wrong to push local government workers on to the dole queues. Birmingham needs its local government workers working, providing the vital services families in the community need to help them recover from the recession.

“These job cuts could force the city into a downward spiral. Shops and businesses will suffer as local people will struggle to afford the essentials.

“We will be seeking urgent meetings with the council, and are calling on them to put a stop to their plans.”

A spokesman for the Local Government Association said all local authorities were preparing for serious cuts to their budgets from April 2011. “Over the next few weeks we expect more of this kind of thing. More of this will be happening in local government.”

The cuts will be a huge blow to Birmingham’s economy, which has lost 138,000 manufacturing jobs since 1998. A report for the council by the independent Centre for Cities thinktank, published in December, said the city’s economy had become too dependent on the public sector.