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Clancy: Scrap Capita contract, introduce zero-based budgeting & free school meals

Clancy: Scrap Capita contract, introduce zero-based budgeting & free school meals

🕔21.Oct 2015

Birmingham city council’s £80 million contract with Capita will be scrapped if John Clancy wins the local authority’s leadership race, it was confirmed today.

Launching his campaign to replace Sir Albert Bore as the Labour council leader, Cllr Clancy said the Capita-Service Birmingham contract to provide the council’s ICT services was unsustainable in its present form and would have to go.

He is also promising a free hot meal to every child attending a council-run infant and junior school.

And in the longer term, he promises to make Birmingham a “free school meals city bringing in new forms of investments through social enterprise, social impact bonds and partnerships to achieve this”.

A list of ‘tough’ decisions he is promising to make includes:

  • Introduce an immediate zero-based budgeting approach to council spending “where nothing is ruled out and everything is on the table”. He says: “We have to decide what we can afford. All contracts, all books will be given over to our, and the public’s, immediate scrutiny so we can balance the books together.”
  • Use the council’s £6 billion property portfolio as a sovereign wealth fund to generate capital spend in building housing, and investing in business, jobs and infrastructure to generate economic growth city-wide. The uplift from growing the economic base, especially in the context of retained business rates, would be kept by the city itself, helping to fight poverty at its roots.
  • Making the city region, combined authority and devolution deal work. Initial investments via Birmingham Municipal Bonds, a Birmingham Municipal Bank, Asset Backed Vehicles, real estate investment trusts would be the starting blocks to creating a much bigger wealth fund at regional level to generate revenue and invest in skills. Working with the combined authority to enhance the current devolution offer with a regional wealth fund at its side, the city’s vast assets would become part of a triangle of regional wealth which would bring in significant liquid financial investment from the West Midland Pension Fund.
  • Set up a 40-ward based poverty commission to identify better the diverse kinds and levels of poverty across the city.

Cllr Clancy does not mention the likely compensation to be paid by the council to Capita for scrapping the Service Birmingham contract. Figures ranging from £20 million to £100 million have been mentioned in the past.

He says:

The Capita-Service Birmingham contract will have to go. In its current form there is effectively a protected £80-100 million a year department. This is simply no longer the kind of spend we can contemplate when we will have to take tough decisions elsewhere.

We will offer the contract out at a price we can afford at a fraction of the current cost. We should look to our own West Midlands firms to do our IT.

In his policy document – Every Child, Every Citizen and Every Place Matters – Clancy calls on the council to “stop seeing itself as doing things to the city, and start to to see itself as doing things with the city.

He says:

Every citizen’s view matters, every place’s needs matter. Every child’s life-chances and needs matter. Every citizen and place must be recognised and valued as having a part to play in how we rebuild a great thriving city. One in which we all have increased pride: a place where we all have a stake in how and why we build Birmingham together.

We must build a city together where poverty is relentlessly borne down upon as the fundamental starting point for our Birmingham enterprise. We can fight poverty together, we can build life chances together.

The city council can’t do this to the city, the citizens must be partners themselves in our joint endeavour. Labour too must work with its city. Building businesses, jobs and homes, and feeding our children can only be done by all of the city working with Labour.

Our city’s businesses should be valued as key builders of wealth and key fighters of poverty too. All of them: in every place. Every business in every place in the city should be part of our joint Birmingham enterprise. Small and medium-sized businesses, especially, need to thrive, and increasingly micro-businesses and small and sole traders in every place need our pride, our support and our partnership.

We need to find new and creative ways for inward investment and local investor development to build businesses, housing and infrastructure which makes us all thrive as employees, business owners, charities, third sector enterprises, social enterprises, mutuals and co-operatives.

We have not yet begun to build an all-ward strategy of smaller business growth to complement this. We must do so and show that every business matters to this council.

What we can do together has been drastically limited by truly awful and desperately unfair reductions in revenue from government. And together we have to make some tough immediate choices. But we must also build hope to counter this. Our revenues may be shrunk, but our ambitions are not.

There are citizens in this city whose thoughts and experiences and ideas can sometimes help us both deal better with the impact of cuts, and help us also build that hope.

The city council has some of the answers, yes, but the city itself through its citizens in every place, every home and every business can provide as many, and more, answers to how we build hope under Labour for a Great Birmingham.

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