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Why Birmingham must stop playing the blame game

Why Birmingham must stop playing the blame game

🕔15.Nov 2012

On the day when millions of Britons won’t bother to vote for police commissioners, it’s worth reminding ourselves why so many people of all ages are disengaged from the political process.

And what better place to start than the desperate war of attrition over who should carry the can for the financial crisis that is forcing Birmingham City Council to reduce its budget by half over a six-year period, triggering £600 million in spending cuts.

The debate, if you can call it that, was enlivened this week by typically combative contributions from ex-councillors Jilly Bermingham and Martin Mullaney.

Labour’s Ms Bermingham used this website in an attempt to blame Mike Whitby, the Conservative who led Birmingham’s Tory-Lib Dem coalition between 2004 and May 2012, for the incredibly difficult decisions about service cuts that Labour will now have to make.

Meanwhile, Mr Mullaney, a Liberal Democrat, went on a Twitter offensive the gist of which was to claim that Birmingham is “going bankrupt” and this is all because Labour has been in power for six months.

The nub of Ms Bermingham’s argument was that Coun Whitby and the cabinet (which included the then Coun Mullaney) understood the scale of the cuts facing the council but cynically went ahead with undeliverable spending plans anyway in the expectation that they would lose power in May, which they duly did.

If this was true, which it is not, the coalition would have been guilty of a serious offence. Coun Whitby and his deputy, Paul Tilsley, have rightly stressed that the 2012-13 budget was duly signed off as legal and deliverable by the council’s chief financial officer.

Ms Bermingham’s account of the election night on May 3 is as follows: “It was a surprise to no-one that the administration changed and Labour took back control. While the celebrations continued, the former ruling parties retreated to their offices, not as some may think to lick their wounds but perhaps to consider what they knew, that sooner or later the budget figures would reveal a greater than feared deficit.”

Significantly, she added:“It is no secret that this is largely due to decisions the coalition made knowing projects could not be completed after the election because the money just wasn’t there.”

She went on to mention an independent report by Birmingham University, commissioned by the new Labour-led council, which showed the budget ‘black hole’ to be far larger than anyone had realised, before concluding: “Thinking of it in terms of your weekly shop maybe an over-simplification for a budget the size of Birmingham Council’s but it still does not explain how the old coalition can justify their methods which could leave the black hole at a figure of £605m.”

Of course, anyone with even a passing understanding of the parlous financial state facing Great Britain plc will know instinctively that Ms Bermingham is glossing over the position, to put it kindly.

Say what you will about Mike Whitby, and I certainly have over the years, but his stewardship of the council’s finances against the backdrop of an unprecedented global economic crisis was as good, or even better, than might have been expected.

The District Auditor paid tribute to this in his 2011-12 report: “Overall, given the level of financial challenge, the council, has managed its finances well.” The report went on to remark that “in many instances services have improved” despite the difficulties facing the city.

The 2011-12 council budget was overspent by just £2.4 million against a gross revenue budget of £3.5 billion, which is a creditable performance. In addition, savings of £213 million were mostly delivered and the council is on course to make a further substantial savings this year.

The Birmingham University report referred to by Ms Bermingham actually presents a positive portrayal of the former coalition’s attempts to steer its way through the financial crisis.

It states: “In many ways, the council has done well to adjust to the exceptional cuts in funding that it has faced in the last two to three years The council has avoided large overspends that would have increased the pressure for significant cuts in services above and beyond those that will already be required to meet future funding reductions.”

Sir Albert Bore, council leader since May, began to lay the groundwork for shaping public opinion against the coalition while dampening expectations about what his administration could achieve at the beginning of this year when he claimed to have identified a £20 to £30 million black hole in the city’s budget for 2012-13.

Perhaps that should have been a beige hole given the scale of cuts now required. We have learnt since May that the projected savings target is about £600 million, compared to the £400 million stated by the Whitby-led coalition.

But, as Sir Albert explained, most of the £200 million increase is largely the direct result of decisions taken recently by Communities Secretary Eric Pickles. It is expressly not the case that Coun Whitby and his chums knew about the additional £200 million but chose to keep quiet.

The challenge Sir Albert faces now would be even greater had the coalition not pressed ahead with its much-criticised business transformation programme, which will deliver £1 billion in savings over 10 years as well as improving customer-facing services. Incidentally, Labour’s threat to expose all sorts of shortcomings with Service Birmingham and Capita’s delivery of transformation appears to have fizzled out. It is said an inquiry has decided that Service Birmingham is providing value for money.

Sir Albert, to his credit, has brought some welcome honesty to the table, warning on more than one occasion that some council services will have to be “decommissioned” and that hundreds, possibly thousands, more local authority jobs will be axed. He doesn’t normally blame the former coalition, although his footsoldiers do.

Birmingham will not get very far by continually playing the blame game. Yes, the £600 million black hole is a serious matter, although more than a quarter of the savings required have already been found. Yes, the £750 million required to meet equal pay claims will push up borrowing and eat even further into already pared-back council budgets.

But where do those who seek to play politics start, and more importantly where do they finish?

The current coalition Government inherited the credit crunch and along with a worldwide economic collapse, which it is said was caused by banks lending money in a cavalier fashion, which some say was made possible by Gordon Brown’s calamitous mishandling of the UK economy. Or shall we go back to the 1980s and Mrs Thatcher’s “light touch” regulation of the banks and the City, or did Mr Brown’s decision to free the Bank of England from Government control backfire?

One thing is clear: it’s a bit harsh to lay the appalling failings of national governments on Mike Whitby’s shoulders.

 

 

 

 

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