Just as you thought it was safe to go back into the waters of local government finance, up pops Jaws II. Indeed, Sir Albert Bore seems to have become Birmingham’s very own Steven Spielberg.
His creative flights of fancy have brought into our imaginations the Brummie ‘Jaws’, no less: the Jaws of Doom .
It might well be a great white shark, or perhaps even a Jurassic Park T-Rex. But now he seems to be venturing into the E.T. zone.
The problem with the ever-increasing doom-fest is that it is starting to lose credibility; as much through the embellished and more lugubrious retelling of the tale.
We really did not need to be told how bad the revenue situation is for the city council. We got that, already. But Sir Albert seems to think we didn’t believe him the first few times round.
So, in a bizarre, reverse gilding of the lily we have to be told that it’s even worse than we first thought .
It’s now even worse than the end of local government as we know it. “A fate worse than a fate worse than death,” as Blackadder put it.
Of course, highborn Osborne’s attack on the public sector involved a monstrous attack on local government finances from which it is reeling and which is counter-productive. There will be long-term negative social and economic consequences for nothing other than ideological gain.
It is being asked to be in the front line in taking the hardest hits, while the real culprits for the economic collapse (the private sector banking big boys) have escaped scot-free and continue to be bailed out on a huge scale.
That aside, the problem is that Sir Albert is concentrating on the long run (of course, we’re all dead in the long run, as Keynes once noted dryly). And when asked to predict the short run, as I have pointed out before, Sir Albert has been, well, far from accurate.
In fact, by popping up in August to remind us he is still there and pointing out that the government has produced a technical paper which piles on the agony even further, he reminds us of the profound difficulties of this game of chance.
Sir Albert had already told us that a bale of straw had broken the camel’s back – and now another straw was being added. In an outbreak of mixed metaphors he went on to say that ‘insult was being added to injury’ by adding a straw which was now really going to break the camel’s back, this time.
As I have pointed out before, Sir Albert has claimed much higher figures when trying to predict government settlements just weeks, even days, out. It hardly bodes well for accuracy years out.
The danger of this game, as has already happened, is that when the figure finally lands it doesn’t always seem quite as bad. The hype-up helps no-one, least of all the Labour Party (whether in Birmingham or nationally).
To cumulate figures well into the next parliament really is a mug’s game. The nearer the actual cut, the greater its shadow looms cumulated into the far future.
So now the size of the Jaws of Doom have been re-measured from a rather uncertain original gape. We didn’t know whether they started at £595 million, or £615 million, or £625 million. Now it’s £825 million. These are since 2010, not from now, of course.
Of course the opposite is also true: if you cumulate real, radical action now on spending then the benefits are also compounded in the future.
And that’s the key point: it’s far more important to concentrate on the immediate, not the long-term, future. How to deal with the here and now is far more important in counteracting the effects of what may, or may not, happen in the distant future, after the next General Election.
I repeat: it is the ‘Claws of Doom’ that Sir Albert really has to worry about. Deal with them and shut them down now, and the future can look after itself.
And those Claws of Doom are clear: the wasteful, pre-crash era, private sector billion pound contracts which the previous Tory-LibDem administration signed on behalf of the citizens of Birmingham which have no place in austerity Birmingham today.
Had Sir Albert dealt with these upon taking office then the City would already be making massive savings now, which, when cumulated themselves, into the future would shut the Jaws of Doom, and with a resounding snap.
Had the council’s ICT, billing and ‘business transformation’ services been run for a much more credible £30 million a year from last year instead of £120 million, then the £90 million saved last year would also be saved this year and every year for the next four years. Cumulated in Jaws style, this would save the council hundreds of millions of pounds.
The same applies to the contracts with Amey, Morrisons, Willmott-Dixon and Mitie.
Instead, a plethora of service reviews of core services were instigated and are still going on and unreported 18 months later. What should have happened was that the private sector contracts should have been the first port of call. Reports on them should have been expedited and the contract price severed to a bare minimum or shut down.
The call for the Audit Office to step in didn’t really help Sir Albert’s credibility, to be honest. Apart from the risk of appearing to be mistaken in what the Audit Office actually does (or is realistically ever likely to do), it would probably have been better for the Audit Office to look into the Capita/Service Birmingham Contract.
If there are immediate exit fees which these companies think they can apply on cancellation, they pale into insignificance compared to the cumulated savings which cancelling or brutally cutting the costs involved would be. Cumulated into the future they help tame the beast and its jaws.
The other claws of doom are clear – the massive dead weight of unnecessary assets the council owns. They hamper the council at every turn and have to be sweated and/or sold.
The council should do so for the NEC, the airport, the city centre shopping arcades it owns and the vast swathes of commercial buildings and property inexplicably on its books. These can help deal with the equal pay headache short-term, but, sweated better, they can also be a jaw-closer.
Whether it is LEPs, Core Cities or Single Pots, Westminster has let the city and the region down badly with promises for the future in the past.
So whatever future Westminster is now postulating for us, Birmingham needs to determine a future of its own. And it starts in the here and now, not in an imagined Spielberg Lost World of the future or in Indiana Jones’s Temple of Doom.
Professor David Bailey is from Coventry University Business School
