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Dale’s Diary: Birmingham Airport takes off, and Sir Albert faces mayoral turbulence

Dale’s Diary: Birmingham Airport takes off, and Sir Albert faces mayoral turbulence

🕔29.Sep 2015

Boom time at Birmingham Airport, where turnover is up, a record number of passengers are passing through refurbished terminals and new international routes are being introduced.

The airport, according to a report by Insider Media, turned over £121.1 million in the year ended March 31 2015, up from £113.7 million in the previous year.

Commercial income increased by more than £5 million to £69.9 million, while aeronautical income was up to £51.2 million from £49.2 million.

While pre-tax profit at Birmingham Airport Holdings fell to £16.2 million from £18.8 million, due to exceptional costs of £4 million associated with a restructure and a further £1.3 million for air traffic control transition, operating profit increased to £30.6 million from £27.9 million.

According to the airport’s directors, next year “looks equally exciting” as the route network continues to expand thanks to the recent runway extension and growing demand for air travel.

Paul Kehoe, chief executive of Birmingham Airport, said:

We have continued to grow passenger numbers and broke the 10 million passenger mark in August 2015 for the first time.

This year alone we have welcomed eight new airlines to Birmingham as more and more carriers realise the strong business and leisure market in the Midlands region and the airport’s investment to offer a world class facility.

We are confident that this trend will continue given the wider range of the destinations that we now offer, and Dubai might possibly overtake Dublin this year to become our busiest route.

This is good news for Birmingham Airport’s private shareholders, Canadian pension fund Ontario Teachers’ Pension Plan, and the seven West Midlands metropolitan councils who between them own just under half of the total share capital.

With the airport seemingly assured of a bright future – HS2 will make Birmingham a mere 45 minutes from Heathrow and drive up passenger traffic even more – attention is bound to turn to whether the hard-up councils might cash in their holdings.

Town hall bosses have traditionally advised against “selling the family silver”, but tough decisions have to be taken when times are hard, and continuation of the Government’s ‘austerity’ programme of grant cuts has put the councils in a tight spot.

After years spent insisting it would never flog the NEC and ICC, Birmingham city council relented at the beginning of this year and disposed of the NEC Group to LDC for £307 million. It needed the cash to help pay off a £1.2 billion equal pay bill after under-paying its women workers for decades.

The council justified the sale by stating that the NEC’s rather tired facilities required major investment way beyond anything local government could provide to compete with rival conference venues across the world. A similar investment argument could be made for Birmingham Airport, where passenger numbers are at ten million a year but could grow to 30 million or even more with the right investment in place.

On the other hand, the councils may wish to keep the airport to head up a significant transportation portfolio at the heart of the West Midlands Combined Authority. Running a major airport as well as the M6 Toll might suit the region’s metro mayor.

I’m hearing that the chair of Birmingham’s main scrutiny committee is considering recalling city council leader Sir Albert Bore to explain why he gave the impression that the West Midlands combined authority hadn’t decided whether to have an elected mayor.

Speaking four days after the shadow WMCA submitted its devolution bid to the treasury, Bore told the corporate resources scrutiny committee he and his fellow council leaders hadn’t ruled a mayor in and hadn’t ruled a mayor out.

Yet the devolution submission is based entirely around the West Midlands having an elected mayor and the powers that might be conferred on that person.

Scrutiny chair Cllr Waseem Zaffar is said by friends to be annoyed at this turn of events and feels that Sir Albert could have been more open about having a metro mayor.

Zaffar is not the only councillor in the West Midlands to realise, suddenly, that the combined authority is so far down the road to an elected mayor that there is probably no return. While they were told that having a mayor was an inevitable consequence of getting the best devolution deal, the impression was also given that an alternative non-mayor devolution submission would be put to the Government, but that hasn’t happened.

It’s uncertain whether Zaffar has the power to force Sir Albert to attend his committee and explain himself. The council leader is a busy man, but no doubt a date can be found before Christmas. Christmas 2016, that is.

There’s no stopping Bob Kerslake, whose star has been rising from the moment his hard-hitting review of Birmingham city council’s governance capabilities was published last December.

Any idea of having a restful retirement after labouring away as Permanent Secretary at the Department for Communities and Local Government and head of the civil service can be dismissed. Lord Kerslake seems to pick up a new job every month or so.

He is chair of the Centre for Public Scrutiny, Kings College Hospital Foundation Trust and the housing association Peabody, and is president of the Local Government Association, as well as chairing the Institute for Public Policy Research’s commission on affordable housing in London.

And if that’s not enough to be going on with, Lord Bob is right back into the public eye by accepting an invitation from ultra-left shadow chancellor John McDonnell to carry out a review of the Treasury on behalf of the Labour party.

Clearly, Labour’s new leadership team must have read and liked Kerslake’s review of Birmingham city council. It remains to be seen whether the Treasury’s famous mandarins get the full-on Kerslake “you must do better” treatment, or not.

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