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Summer Special: Challenges continue at Council House

Summer Special: Challenges continue at Council House

🕔23.Aug 2016

In the third of our special summer reports, the Chamberlain Files team examine a turbulent 12 months for Birmingham city council. 

The past year has been one of the most momentous in Birmingham city council’s recent history with a successful leadership coup, enough political intrigue to fill a book, and the Council House coming closer than anyone would ever wish to be to takeover by Government commissioners.

Add to that a seemingly permanent financial crisis as civic leaders try to find ways to deliver the Government’s austerity programme while reinventing the concept of public services, all the time under the watchful eye of the Birmingham Independent Improvement Panel, and it would take a brave pundit indeed to predict where the city council might find itself by the summer of 2017.

It became clear a year ago that a change of leadership at the top of the council was probably going to be necessary to convince the improvement panel that the Kerslake Review recommendations were being taken seriously and that Britain’s largest local authority would transform itself into an outward-looking organisation capable of forming meaningful partnerships with the private sector and community organisations.

Improvement panel reports to the then Communities Secretary Greg Clark warned about the slow pace of change, while Mr Clark dropped heavy hints that further Government intervention might be necessary if the reform programme did not move up a gear.

Matters came to a head in October 2015 when long-serving Labour council leader Sir Albert Bore was forced out after a majority of his cabinet lost faith in him. He was replaced on 1st December by backbencher John Clancy, who had never held a cabinet post and had been dismissed by Sir Albert’s supporters as “a novice” who was unfit to be tipped in at the deep end.

Clancy won by a single vote, beating Penny Holbrook, and immediately embarked on a very public wooing of the improvement panel and Colmore Row in an attempt to convince the business community of his determination to deliver the Kerslake agenda and to reposition Birmingham as a united city where public, private and voluntary sectors work together for the good of all.

On his first day in charge Cllr Clancy met Birmingham Chamber of Commerce boss Paul Faulkner to underline his commitment to wealth creation through private sector growth.

He also pointedly told chief executive Mark Rogers to get on with the day-to-day task of running the council and to implement the Future Council plan setting out the changes to working practices that would have to be put in place by 2020.

In doing so Cllr Clancy was upholding a key Kerslake criticism of the council:

The clear boundaries that should exist between the roles of members, who should set the strategic direction of the authority and hold officers to account for delivery, and the operational role of officers, have become blurred. For the council to improve this must change.

Cllr Clancy’s attempts to put a rocket under the reform process impressed the improvement panel, with chair John Crabtree announcing that his team would take an extended summer break to let the new council leader get on with the job unhindered.

And at the May municipal elections, Cllr Clancy’s position as leader was strengthened after Labour made a net gain of three seats and took 51 per cent of the total vote.

So far, so good. The improvement panel, though, will meet again in the autumn with a view to reporting to Communities Secretary Sajid Javid on the council’s progress and the first thing the panel will wish to do is be convinced that Cllr Clancy and his team can deliver a balanced budget over the next four years against a backdrop of continuing Government grant cuts. The outlook at the moment, putting it diplomatically, is uncertain.

Just two months into the 2016-17 financial year the council’s finances were projected to be £68 million in the red with officials struggling to deliver last year’s budget cuts as well as this year’s savings, and failing to cope with increasing demand for costly adults and children’s social care.

The difficulties facing the council in delivering a workable long-term financial strategy were highlighted by the improvement panel in a letter to the Communities Secretary:

The council has recently published a consultation document about the council business plan and budget for 2016 and beyond, which identifies proposals to achieve savings of around £216 million over the next four years out of the approximately £250 million total savings required over the period.

It is difficult to overstate the extent of the challenge facing the council in achieving reductions of this scale to the timescales required. This is an extremely demanding timetable given the nature of the proposed changes.

Other major budget reduction proposals, especially in relation to adult social care, will require really effective partnership arrangements with a range of key partners to be in place.

The letter noted that two of the biggest cost-cutting proposals – changing the terms and conditions of the council workforce to save £34 million, and reaching an agreement with the NHS to merge council and health budgets – would be difficult to deliver within the timescale envisaged.

Problems have been made worse by a failure to deliver £35 million of planned cross-departmental savings in 2015-16, before Cllr Clancy became leader, on top of £52 million outstanding for this year, leaving a total of £123 million in savings to be found during the rest of 2016-17.

The bulk of £45 million of savings where actions are not yet in place to realise them lies with the People directorate which provides social care for adults and children.

Fortnightly meetings are being held between Cllr Clancy, his deputy Ian Ward, and senior officials in an attempt to put the finances back on course. Inevitably, some tough decisions are around the corner for Labour councillors and these include approving a new ‘operating model’ for community libraries to save £1.8 million a year, and scaling back the home to school transport service to save £2.5 million.

Both of these initiatives defeated the 2004-2012 Conservative-Liberal Democrat coalition that ran the council and will require very careful handling if rebellions are to be avoided from backbencher Labour councillors fighting to save local libraries or attempting to preserve free school transport for children with learning difficulties.

If the past year has been momentous for Birmingham city council, the next year seems certain to be just as lively.

Kevin Johnson and Paul Dale

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