Huge budget black hole facing West Midlands Combined Authority plugged

Members of the WMCA Board were told a projected near £120 million revenue deficit for the 2026/27 financial year had been reduced to zero without the need to introduce a Mayoral precept in people’s councils taxes or cuts to transport budgets.

Mayor Richard Parker said he had inherited the situation when he was elected in May 2024.

Back in November, the board was told serious of measures were implemented such as generating efficiencies and using flexibilities to transfer capital funding to revenue to help claw back the deficit.

A report by Claire Nye, chief finance officer, said: “The funding gap (£119.8m) for 2026/27 has been fully closed and reduced to nil, with further reductions of £95.8m to £33.7m in 2027/28 and £105.2m to £29.1m in the following year.”

At the meeting, Mr Parker said: “When I got elected, the deficit identified in May 2024 was we were facing a £120 million revenue deficit for the financial year 2026/27.

“I can remember going back through seven or eight years of transport funding reports to try to get under the skin of exactly why that position had materialised and why it had not been addressed in any structural way in the previous six or seven years.

“In particular, I was concerned in the past we’d addressed these annual deficits in a rather ad-hoc, short term way without addressing or fixing the underlying structural problems that were giving rise to those annual deficits.

“I’m really pleased with the great work Claire Nye has done, working with finance officers across the region that we’ve now got ourselves in a position whereby we have addressed that deficit for 26/27 and we are very close to and will be resolving the ongoing deficit position over the years ahead.

“When I took over, I was really clear that we will take full fiscal responsibility for ensuring we manage the Combined Authority’s finances sensibly, we do it properly and be very transparent in the way we did it.

“More importantly, we would address those problems by working collaboratively on those issues we faced and we resolved them by having very open conversations about the options available and the approach we take in doing so.

“I’m also really pleased we have achieved that budget situation without the requirement to raise a Mayoral precept.

“I campaigned on that and I was never going to. The budget position demonstrates that was never necessary.

“I’m very pleased we’ve done it without having to cut transport funding and I’m very pleased we’re not having to do it by reducing the funding we use for supporting our bus services in the region.

“When I got elected, those options were put in front of me as being necessary in resolving those deficits.

“The fact we got where we are, they way we’ve done it by saving services and not increasing taxes on people is a fantastic achievement.

“I couldn’t have done it without the support of everyone in this room, particularly the financial team led by Claire Nye.

“This is what serious leadership looks like. If you face a problem, you don’t run away from it. You fix it. We now move forward together and stronger.

“The previous administration left me with a £120 million financial hole, we’ve not just repaired it, we’ve now turned our back on that position and we can move forward with a great deal of confidence and the financial stability this region needs.”