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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is elected mayor of the West Midlands region
When Ozzy Osbourne wowed the Alexander Stadium two years ago and closed with his immortal cry of “Birmingham forever!” it was a fitting finale to what had been an epic Commonwealth Games.
Ozzy, one of Birmingham’s greatest sons, flew back from LA specially as he — alongside hundreds of millions of others from across the globe — had been captivated by the city’s hosting of the games. The event helped to smash stereotypes that had besieged the city for decades. No longer the butt of anyone’s jokes, Birmingham turned a corner. Record investment followed record visitor numbers, with cranes on the skyline kick-starting a development race.
A little over a year later, the city’s reputation was in the mud. “Bankrupt Birmingham” headlines beamed across the world as it emerged that the city council had filed two section 114 notices. The largest local authority in Europe had in effect gone bust while the city around it was booming.
This week, for the first time, the results of this effective bankruptcy have been laid bare: a 21 per cent increase in council tax, a 100 per cent cut to the city’s cultural organisations, street lights dimmed, youth services cut, adult social care cut, libraries to close, burial costs going up. The list is long and agonising, with even the best orators struggling to find the words to describe just how grim these cuts are.
It’s a well-known fact that local authorities across the country face financial challenges. The government is upping the funding that councils receive, but the hangover from the austerity years remains.
That, however, is not the reason Birmingham city council has gone bust — nor is it the reason Croydon, Nottingham, or Thurrock have gone the same route. Poor decision-making at local authority level can have dire consequences, and I’m afraid the situation in Birmingham is one made in the city council.
The reality is the culture within the organisation failed: a recent report identified an optimism bias, a deep-seated blame game and a breakdown of trust between elected officials and officers. This meant difficult decisions were avoided — the council pretended everything was fine when it wasn’t. The result? A £19mn IT system now set to cost over £100mn after a botched installation, and a £760mn equal pay claim.
The equal pay problem has returned to the city council with this additional bill despite the authority having paid out a previous £757mn on an equal pay case dating back to 2012, underlining the leadership and political failings.
Brummies are hurting — and immensely angry at being let down in this way. The usual self-deprecating wit has been replaced by outrage, with innocent citizens facing the reality that they will be footing this bill and paying a lot more for a lot less. And this is just the ones who can actually pay; what about some of the least fortunate in society, already teetering on the edge? These cuts really could be catastrophic.
But in Birmingham, being down is not the same as being out. Public bodies, including the West Midlands Combined Authority (WMCA) which I lead, are looking at how we can offer support and, in some areas, step in.
The private sector, which has so often bet on Brum’s future, is doing so again. The government will be reviewing what role it can play. And the general public is mobilising, getting ready to fight their corner before any council cuts are signed off at the start of March.
There is no magic wand, but every part of this city will do what it can to minimise the impact of the cuts.
And life outside the city council carries on. Last year an inward investment surge led to more projects coming to the West Midlands than Scotland and Wales combined. At the WMCA we are continuing to invest to keep up with the private sector’s pace, and serve our citizens in Birmingham and the rest of the West Midlands.
We are doing this by protecting our public transport network with fares kept low; investing hundreds of millions in new bus lanes, rail stations, metro routes and cycleways; on bucking the national trend on housebuilding and affordable housing; plus overseeing a rapid increase in the skills of our workforce — a key driver of the phenomenal inward investment.
Birmingham city council’s failure sticks out like a sore thumb in a region where budgets have been balanced in all of the six other local authorities, plus the WMCA itself. It’s now incumbent on all of us here to step up, protecting citizens as best we can and investing in the future. Whatever the circumstances, and however gruesome it might be, Birmingham never gives up.