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How to solve the ‘Birmingham problem’: devolution and an elected mayor

How to solve the ‘Birmingham problem’: devolution and an elected mayor

🕔07.Feb 2014

What do you do about a problem like Birmingham?

This is a question that has consumed local government nerds for years.

The thing is, this city of almost 1.1 million people is just too large to be administered effectively by a single body. This much should be obvious. If I had a fiver for every time I’ve heard a politician say ‘one size doesn’t fit all’ since 2000, I’d have accumulated enough to pay for a trip to one of Birmingham’s Michelin-starred restaurants.

Birmingham City Council is the largest local authority in the country, by a considerable distance. London, of course, is a far larger city, with a population of eight million. But London has 33 borough councils and a strategic body – the Greater London Authority – controlled by an elected mayor, who as I am sure most people in Britain are aware, is Boris Johnson.

If London was governed in the same way as Birmingham, through a single unitary authority, the London Council would have 960 councillors to reflect the same ratio of elected members to population as Birmingham. That would be ridiculous, of course. Nothing would be achieved and effective governance would all but collapse.

Yet here in Birmingham, we struggle on with 120 councillors and 40 wards. The scale of this is difficult to grasp, but when you realise that some of the wards are as large as town councils and that Birmingham’s 10 parliamentary constituencies are as large as some borough councils, the picture becomes clearer.

The latest, excellent, contribution to the ‘what do we do about Birmingham’ question comes from Gisela Stuart, the MP for Edgbaston, who makes the case for widespread reform along the lines of an elected mayor and meaningful local tax raising powers.

Mrs Stuart explains the Birmingham problem eloquently and persuasively, starting with the undeniable statement that the way cities are currently funded by the Government is broken beyond repair, chiefly because the council tax raises proportionately a tiny amount of a council budget.

In Birmingham, council tax raises less than 10 per cent of the council’s total budget. The rest of the funding is made up of grants at the behest of the Government or European Union, and business rates, which the Government also controls. Therefore, local councillors simply become administrators of the Government of the day, their hands tied by centralisation on a grand scale.

Mrs Stuart puts it like this: “Hands up who can explain the financing structure and the formulas used to determine how much a city has to spend. Most voters think that it’s their council tax which keeps their local authority afloat.

“Council tax is an increasingly small element and certainly not the answer for the future. Artificially held low over years and now through the referendum requirement as good as capped, it’s incapable of providing a sufficient revenue stream, not least because successive governments shy away from re banding.”

The council tax issue is compounded by Chancellor George Osborne’s ruthless attack on local government funding. Grant cuts amounting to more than 30 per cent in the space of a few years will leave Birmingham and other councils in the unenviable position of slashing or axing non-statutory services like community libraries, leisure centres, swimming pools and museums in order to use what’s left in the coffers to address growing demand for children’s social services and adult social care.

Clearly, then, any serious attempt to reform local government has to begin with providing new local tax-raising powers and greater accountability over the way in which money is being spent.  The wind appears to be blowing in this direction with the Coalition Government insisting it is committed to a localism agenda, while Labour is beginning to talk about devolving powers and budgets to local councils if it gets back into power.

Tory grandee Lord Heseltine even popped up for a cameo role last year, leading a Government charge supportive of localism. He proposed shifting £60 billion of Whitehall and European money to councils via Local Enterprise Partnerships (tune in next week for our special LEP Week). The Government agreed on £10 billion, which is I suppose a start.

I’m tempted to give the impression of being a very old bore by saying ‘I’ve heard it all before’. But the truth is, I have heard it all before and can recall countless occasions since the 1970s when local government was to be ‘empowered’. Unfortunately, the promises came to very little, usually disappearing into the ether once vested interests in Whitehall got hold of the reform plans.

Perhaps the time is approaching, however, when a Government of whatever political persuasion will grasp the Birmingham problem. I’d simply make the point that a framework for devolution already exists in the shape of the city council’s 10 District Committees, based on the parliamentary constituencies, which have recently been handed devolved powers to run local services.

These districts, or district councils as they must surely become, should be give tax-raising powers and continue to run local services while an elected mayor of Birmingham would take care of strategic issues such as economic development, transport and planning. Many people will pick holes with this idea, but it has to be an improvement on what we have at the moment.

Gisela Stuart’s article first appeared on the Think Cities website published by the Centre for Cities think tank.

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