Birmingham may be facing budget cuts of more than £100 million next year but it shouldn’t cut services, Local Government Secretary Eric Pickles tells Political Editor Jonathan Walker.
Local Government Secretary Eric Pickles has praised Birmingham City Council for preparing for dramatic cuts in Government spending – and accused unions of exaggerating planned job cuts.
He complained that the city had been accused of sending out redundancy warnings to 26,000 staff when, in fact, the authority was simply changing its working conditions, he said.
The outspoken Conservative Cabinet Minister set out his vision for local government in the age of austerity as he spoke to regional newspapers at Westminster.
Mr Pickles said he had no sympathy for councils cutting services, and claimed they should have drawn up plans to cope with spending cuts long before the figures were announced.
Authorities which axed services instead of cutting salaries for top managers would be punished by voters, he added.
He also insisted the creation of mayors in cities such as Birmingham would dramatically increase their presence on the world stage.
Mr Pickles was speaking after the Government confirmed that residents in England’s biggest cities including Birmingham and Coventry will be asked whether they want a mayoral system, in a referendum in May 2012.
If they vote “yes”, then direct elections for a city mayor will be held in May 2013. In the meantime, Birmingham City Council leader Mike Whitby is to become what the Government calls a “shadow mayor”.
He will have all the powers which existing mayors in other cities such as Middlesbrough already enjoy. The aim is to pave the way for a directly-elected mayor in 2013. The plans were announced as the Government published its Localism Bill. But at the same time, Mr Pickles published cuts in funding for authorities across the country.
Grants to Birmingham will be cut from £932.6 million in 2010-11 to £827.2 million in 2011-12. This is a cut of £105.4 million.
But the figures for 2011-12 include a new fund of £15.4 million to pay for social care, which has been diverted from the NHS. Without that money, Birmingham’s cut is even higher.
Other authorities will also experience significant cuts. Funding for Sandwell was reduced by £23.7 million and for Wolverhampton by £20.4 million. But councils should already have begun to make savings without affecting services, Mr Pickles said, claiming that Labour Chancellor Alistair Darling made it clear savings would be needed when he delivered a budget in March this year.
“Come on. Labour were very clear that they were going to take fairly substantial sums out of the economy, of which local government would have borne the brunt, which would have been front-loaded.
“Any prudent chief executive, any prudent leader, from Mr Darling’s last budget, would have been preparing for something on these lines.
“And it is unimpressive for a council to say we have only got a couple of months to do this. If they have been wasting their time and pretending this isn’t going to happen then that is singularly unimpressive.”
He praised Birmingham City Council for finding ways to cut costs after the authority issued letters known as 188 notices in September, warning that it planned to cut some of the allowances staff receive, including allowances for weekend working, night working and irregular hours.
Mr Pickles said these had been wrongly portrayed as redundancy notices, and highlighted a car parking allowance received by some council staff, which is being reviewed.
“These are 188 notices. They are issued for a variety of reasons. For example, Birmingham has issued 188 notices to 26,000 of their workforce. And I have noticed, I think it was GMB, was saying these people faced potential redundancy.
“Actually it’s not, it’s about car parking. So you issue these kind of notices to change the conditions.”
A GMB statement in July claimed that Birmingham council staff are “faced with dismissal unless they accept huge pay cuts”, a reference to cuts in their allowances.
However, a statement by the city council seems to endorse the union’s view. It states that “one of the possible outcomes at this stage may be to dismiss employees and then to re-engage on new contracts of employment”.
Staff who refuse the new contracts will therefore be out of a job.
Mr Pickles admitted authorities would be forced to cut jobs.
Referring to councils across the country, he admitted: “I do expect a significant number of posts to go. And clearly I am looking towards a fair amount of redundancies among chief executives and among top officials. Because clearly to get the benefit of joint working you need an awful lot less chiefs.”
He praised councils who were looking for ways of sharing services. These include Black Country authorities in Sandwell, Dudley, Walsall and Wolverhampton, which are working together on plans to share Trading Standards and IT services, and possibly emergency planning, health and safety, public health and some children’s services too.
Mr Pickles also called on councils to share senior managers, such as chief executives.
“I do believe there are significant savings to be made by merging back office functions. A few authorities have done that.
“I’d like to see them sharing chief executives, I’d like to see them sharing their legal department, their accounts department, their payroll, their IT, their planning, their education support functions, and when they’ve done all that if they feel they have to close libraries then they should come and talk to me again.”
Councils which failed to save money would be punished by voters, he claimed – thanks in part to a new Government directive forcing them to print details of all spending above £500 online.
Ministers hope bloggers will plough through the information and highlight inefficiencies or abuses.
The Government’s plans to create directly-elected mayors have now been confirmed after months of confusion and speculation.
Mr Pickles said he accepted that plans to turn existing council leaders into “shadow mayors” might give them an advantage when an election is held.
He said: “Of course it will give them an advantage but I strongly suspect, as we’ve found in those mayors that have been successful, that often they come outside the existing political machine. Of course if someone wanted to put something back in public life this is quote an attractive proposition.’’