Almost 200 men and women running Birmingham City Council’s old people’s homes are to be made redundant.

Council leaders admit that the decision is a sign of things to come, as the impact of a social services modernisation programme becomes clear.

In total, more than 300 staff have been put under warning of possible redundancy following decisions to replace all of the council’s homes for elderly people with sheltered accommodation and independent sector provision and to shut two day centres. Some 180 employees will definitely go this summer, saving £4.8 million a year.

The council is warning that phase two of the home closures will result in “significant” redundancy costs and is asking the government for emergency funding to meet the £2.9 million cost of the initial tranche of redundancies.

Adults and Communities Director Peter Hay said the cash was needed to avoid paying for the redundancy programme through an “abrupt withdrawal” of money from front-line services.

He hoped job losses could be delivered voluntarily but would not rule out compulsory redundancies.

Deputy Labour group leader Ian Ward called the development “very worrying”.