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Mark Rogers calls time on salami-slicing era as council faces tough budget choices

Mark Rogers calls time on salami-slicing era as council faces tough budget choices

🕔10.Nov 2015

Anyone who doubts Birmingham city council will have to change dramatically the way it operates in the immediate future should look at chief executive Mark Rogers’ latest blog, writes Paul Dale.

Taking advantage of the kerfuffle over the pending resignation of council leader Sir Albert Bore and the contest among Labour councillors to find a replacement, Rogers has zoomed in under the wire to make one or two highly relevant points for whoever gets the job.

His overriding message is that “conversations” about next year’s council budget “need to be very different from the ones we had last year, let alone five years ago”.

Rogers doesn’t mention the dreaded salami slicing metaphor, but it is obvious that he is warning everyone, including the new leader, that 2016-17 really will see the end of an approach to public spending cuts that relied on trimming pretty much a set percentage from each departmental budget, regardless of the consequences.

One interesting thing about this is that we have been told each year since 2012 by Sir Albert Bore that salami slicing is no more, only to be amazed when the 2012-13, 2013-14 and 2014-15 budgets turned out to contain enough sliced salami to fill several supermarket shelves.

The much talked about zero budgeting exercise never materialised, probably because it would have been too difficult to get the results of such an initiative approved by the Labour group. It is, after all, always easier to trim a little from hundreds of individual budget heads than start afresh by deciding what a council facing rapidly increasing demand for diminishing resources should really be concentrating on, which inevitably means cutting spending completely in a number of areas.

The apocalyptic end of local government and wholesale decommissioning of entire services, again promised each year since 2012, never happened. Somehow, Sir Albert always managed to find a few millions of pounds in savings without closing the council down.

And it was the failure to bring forward a convincing and workable three-year budget in 2013-14 that so alarmed Lord Kerslake.

To quote the Kerslake Review:

Birmingham city council’s core financial management processes are improving and the council has plans to set a balanced budget for 2015-16. However, without substantial reform some services will become unsustainable in the next few years.

The council have not yet gripped the scale of the change that is necessary and have let some issues build up over many years so that the problem they face today is acute. The council needs to take decisions that will ensure it is able to set a budget for the next three years without the expectation of further funding from central government.

Kerslake went on to describe the budget reductions agreed so far as “reactive and tactical” and said they were unsustainable. He added:

They need to be more strategic, transformational and underpinned by stronger analysis. A step change is needed.

The existing service review process appears to have been based on the assumption that that the additional funding from central government will be made available in 2016-17 and 2017-18 when that decisions is completely outside the council’s control. We have not been presented with evidence that the council yet has a credible Plan B if the additional funding does not materialise.

To recap, then: without substantial reform some services will become unsustainable in the next few years; the council has let some issues build up over many years so that the problem they face today is acute; something more strategic and transformational is required.

I doubt somehow whether Mr Rogers would have been so blunt had he not found himself slap bang in the middle of the departure of Sir Albert and the election of a new council leader on December 1. He has a couple of weeks’ grace to say exactly what he pleases without bothering about upsetting his political masters, and good for him.

In his blog Mr Rogers talks about an “irrevocable and seismic” change that is imminent for the council. He adds:

The challenge is no longer about simply shrinking the council; our role as councils has dramatically changed over the last five years and the crunch is now coming in which doing everything but on a smaller scale will need to be replaced by doing things completely differently and, in a number of instances, not doing them at all.

Collectively our capacity has dramatically shrunk, but the demand has not. Indeed in many ways the demands are growing year on year thanks to welfare reforms and an ever-ageing population.

So our challenge now is to work more closely with partners, community groups and residents. We’re going to have to find together new ways of delivering services, developing new relationships and overcoming whatever barriers may have existed in the past.

Councils have less money to spend, meaning it is now impossible to do everything we did in the past. But demand has not gone away.

So we have to do things differently and that means working much more closely with partners, our communities and individuals to manage demand and redesign services.

Mr Rogers will have access to the preliminary recommendation from a demand management exercise by Deloitte, the results of which have been kept from councillors up until now. The council budget must be set at the March 1 council meeting, which leaves a little over three months to sort things out.

The message for the new council leader is clear: we can’t repeat the budget-making mistakes of the past. Whether anyone is listening and is prepared to act accordingly is another matter.

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