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Birmingham council reels from scathing reports
From the Financial Times of Sun, 14 Dec 2014 12:14:45 GMT
Residential properties sit against a backdrop of the Birmingham city skyline in Birmingham, U.K., on Wednesday, Oct. 6, 2010. Planned cuts to U.K. public spending will hurt office markets such as Birmingham and Liverpool the most. Photographer: Chris Ratcliffe/Bloomberg©Bloomberg

Birmingham’s Chamberlain Square may be dominated by the bustling Christmas market but for councillors inside their imposing offices there is a distinct lack of festive cheer as they digest damaging reports into their administration.

The Labour council was already bracing itself for an update on the city’s failing schools from Ofsted, the education watchdog. A government-appointed inquiry by Lord Warner was also due to report into the poor state of its child protection services, which were taken out of council hands last year.

But Sir Albert Bore, the council leader, is now reeling from a triple blow after a government-commissioned review of “the governance and capabilities” of the council showed a “dysfunctional” management failing its poorest communities and unable to deliver even the most basic services.

Sir Bob Kerslake, the top civil servant who authored the report, recommended the setting up of an “improvement panel” — effectively a body to oversee Birmingham’s performance from Whitehall.

The panel will report back to government next December. If insufficient change has been made, the clear threat is that the break-up of the council would be back on the table.

Sir Albert’s official response did not hide his anger at this meddling in the city’s affairs. Several councillors complained of feeling “put under the cosh” and “singled out” by the Conservative-led coalition.

Certainly Eric Pickles did not mince his words, telling the House of Commons that Birmingham “risks losing its status as our second city for good” if it failed to improve.

But listening to the communities secretary you might almost think he believes Birmingham is run by a hard left council of the 1980s.

In fact many of the city’s current problems date from the time the city was under Conservative-Liberal Democrat control.

The horrors of a children’s services department which has been starved of cash, overworked with complex and difficult cases and reliant on temporary agency staff to plug gaps have been well documented.

Birmingham’s poor schools in turn have left young people ill-equipped to take the jobs which — as the economy recovers — are now coming to the city in record numbers.

Councillors complain their ability to address these issues is hampered by a harsh budget settlement, which meant Birmingham has had to find £641m in savings since 2010, reducing the workforce from 21,000 to 13,000.

They feel central government has not sufficiently acknowledged the steps already taken to sort out the city’s finances.

Many of the savings have been made possible by improvements in management. The council, for example, estimates it saved £100m through more efficient procurement.

Even Sir Albert concedes the council “can emerge from this period of austerity in better shape”.

More than a year ago he warned that England was facing “the end of local government as we know it”. But the council’s budget proposals, published last week, show that easy savings are still being found. One example is the plan to dispose of city centre car parks which “cost us more to run than is paid to use them” the council says.

The current budget for 2015-16 envisages reductions of £117m — a figure that would have been higher but for debt rescheduling and dipping into reserves.

Grant Thornton, the city auditors, calculate debt charges are reduced this year by £51m and a further £567m over the next 20 years. However for the subsequent 30 years, the charge increases by £1.7bn.

The auditors warn of “the significant additional burden this change places on future taxpayers and the potential impact on the long-term financial viability of the council”.

They also point out it could compromise the ability of the council to settle the £638m it still owes to hundreds of female staff over a longstanding equal pay dispute from the early 2000s.

The government has allowed the council to capitalise £500m of the original £1.1bn liability, but in a further blow to the council’s prestige, prime property assets such as the NEC exhibition centre are being put up for sale to pay the bills — so far without any takers.

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