Cllr Meirion Jenkins is the Shadow Cabinet Member for Finance and Resources on Birmingham City Council.
Is Labour-run Birmingham City Council the worst run council in the world? If there was such a contest, then our dreadful Labour administration would be in with a good shout. Birmingham is the largest metropolitan authority in Europe and the country’s second city, with a population of 1.1 million.
The Labour administration lurches from one financial screw-up to another. Despite various interventions over the years, with the Kerslake Review and the Birmingham Improvement Panel amongst them, the underlying problem, in my view, remains a lack of sound judgement, a lack of attention to detail, and a political resistance to good house housekeeping and budgetary control by the Labour leadership. In short, they are just not good enough to run Europe’s largest metropolitan authority. The problem is compounded by ordinary members not having the power or the time to properly challenge and hold the executive to account. Far too much power sits with officers, who have a £10m spend authority without needing to seek member approval. I am always left with the impression that the council is run for the benefit of anybody but the people that should be the real ‘bosses’ i.e. the electors. Many of the working practises became outdated in the private sector and other councils years ago. The Birmingham Improvement Panel referred to a “1970s culture.”
After many years of residents complaining about the waste collection service, last year we had a bin strike that lasted 221 days which cost the city more than £6 million. With an average collection of household waste per normal working day being 1,400 tonnes, the three hour strikes might leave 466 tonnes uncollected each day and that assumes that normal working resumed immediately. The situation was compounded by the fact that even before the industrial action started on 30 June 2017, there was a backlog of over 2,000 streets across the city awaiting missed collections and the service was already overspent by £2 million. Whilst this was a fight that needed to be fought, due to lack of judgement and political resilience, after seven months, a high court injunction against the city and the resignation of the Labour Leader, the Labour administration capitulated to the union. They ended the strike by agreeing to the creation of a new job description, enabling waste staff who were otherwise due to be reduced to a lower grade to retain their existing grade.
It was a fudge of which even the EU would be proud. More damning, a year later these arrangements have only just been implemented. Even more damning, in the last few weeks an independent report has concluded that the then Labour Leader (who resigned as a result of the strike) acted ultra vires in attempting to agree a binding deal with the union and directly ordering relatively junior staff to override instructions from senior officers. At one point, the then Labour Leader took separate legal advice (at the council’s expense) to support his case to override the senior officers’ advice, which itself was underpinned by that of a QC instructed by the officers (at the council’s expense).
Further industrial action has now been launched, with the cause of the dispute relating back to the original dispute last year.
Many of the issues around the waste collection service have impacted Birmingham’s equal pay dispute with comparisons between payments made to waste staff and other non-waste staff in the council. Equal pay claims have cost the city more than £1 billion.
Section 24 notices
These are issued by external auditors when a council’s financial position is giving grave cause for concern. These notices are very rare but Birmingham has had two – the only council I know of to achieve this. As Grant Thornton said “The budget comprises two things – getting it right and delivering it and I think last year you got neither right”. Birmingham has been burning through reserves to meet day to day expenditure. If Labour does not start operating within budget, the city will become insolvent. With the Commonwealth Games coming to Birmingham in 2022, the need to operate within budget may finally be forced on our financially incontinent Labour leadership.
Payments to departing officers are eye watering.
It’s a matter of public record (published accounts year end March 2017) that a former chief executive received £695,000 after being at Birmingham for just three years. In the same year, two other officers received £649,000 between them. Over the last four years, there have been three leaders, three finance directors, three chief executives, and six different chairs of audit committee. I have been on audit for most of the time since I was elected in 2012. There is a continual resistance to proper governance and transparency. In this year’s audit report, Grant Thornton said ‘As external auditors, we have not always been made privy to emerging issues’.
The auditor also said:
“The Council also has a track record of not reporting governance failures effectively…”
Some discussions are moved into private session which, in my view, would be more properly held in public. Saving embarrassment for members or officers is not a justification for private session, against which a very high bar should be set.
Lack of transparency
As Labour’s audit chairs come and go, there have even been occasions when officers have refused audit committee access to documents. For example, current officers deny the audit committee access to details of compromise agreements entered into with departing senior staff – I suspect to conceal the incompetent or overly generous terms agreed, but it’s hard to know when even audit committee are denied knowledge. In any private sector business, when audit committees are kept in the dark, it may be a good time to consider selling your shares in that business.
Our incinerator contract is operated by Veolia – it was a 25-year contract. Despite having 25-years notice (and a scrutiny report on the subject three years ago), Labour ran out of time to re-tender the contract and are now proposing to issue a five year extension (subject to a call in as I write). It’s really hard to imagine directors in the private sector keeping their job after such a shocking failure to properly manage contracts.
In my view, the structure and management of the council needs total reform, treating such a large city more like the Scottish or Welsh assembly. I would reduce the current 101 councillors to around 30, pay enough for members to allow sufficient time to undertake their roles properly, both in power and opposition, and provide members with proper administrative support, allowing members to recruit their own shared staff.