Working together, Standing up for Birmingham
Checked against delivery
Thank you, Lord Mayor.
When I presented our Budget to this chamber last year I began by saying that it was the sixth budget I had presented as a Leader of this City Council and by far the most challenging.
Lord Mayor I have to say that my seventh Budget has been even more difficult.
The scale of the challenge
Last year we put in place £101m of cuts, contributing to the £375m of cuts delivered over the period 2011-12 to 2013-14. We have had to find a further £86m for 2014-15. But of course we are cutting into budgets that have already been reduced by £375m in the last three years.
We have now reached the point where it is necessary this year and, more widely next year, to start reducing spending significantly in some front-line services in order to balance the books.
In 2015-16 we are anticipating a further £207m of cuts of which only £48m is so far identified. In 2016-17 a further £81m of cuts will be needed, of which only £28m has been identified and in 2017-18 a further £72m - almost all of which is still to be identified.
Yet, despite this challenge we have been able to protect many important services in the 2014-15 Budget. We have set both clear priorities and reflected the feedback from the biggest budget consultation this council has ever conducted.
We have conducted a comprehensive consultation and listened
- Four public meetings, an online survey and a People's Panel survey.
- Special consultation meetings with the Disability Forum, voluntary organisations and through an event with 120 businesses.
- A webcast cabinet roundtable engaged 517 people and visited by over 2,500 on the archive version, and we have had 31,000 visits to the service review videos.
Discussions also took place on the service reviews at all 40 Ward Committees.
Lord Mayor, in response to the consultation, we have revised the 2014-15 budget proposals:
- Removing the proposed cut to the Park Keepers and Rangers services, to enable the service to encourage further volunteers
- Allocating £1.6m more than planned to services for vulnerable and older people, to be delivered through the Health and Wellbeing Board
- Providing £1m to develop an offer to young people around youth engagement and a more joined-up approach to services for young people
- Adding a further £0.5m to maintain street cleanliness while medium term improvements take place through new equipment, wheeled bins and better enforcement and providing an extra £0.2m for collection of autumn leaf fall.
Thanks to staff
I would like to thank once again the many staff who have worked tirelessly during the year to help us bring this Budget before you today.
And that includes many who are no longer working for us.
They did not come into public service to make swingeing cuts, any more than we politicians did.
And I would also like to thank the many members of the public who have responded with suggestions for doing things differently - and the many hundreds who are already Standing up for Birmingham by making a difference every day in their neighbourhood and their community.
Lord Mayor, the Business Plan we are presenting today reaffirms our core mission as set out in the 2013 Leader's Policy Statement - to work together to make Birmingham a fairer, more prosperous and more democratic city. Within those aims are a small number of key priorities that have guided our decisions on this budget. These are set out in part 2 of the budget document and reflect the service reviews and Green Papers taken forward in 2013 - the most comprehensive that we have ever carried out.
As a result of the additional cuts imposed on us by the government, we have already begun the service review programme for the 2015-16 and the years beyond and we will be starting with a rigorous analysis of the statutory minimum services we must provide and what they will cost. We will also be completing a comprehensive assessment of the priority we will give to each specific service, based on the contribution they make to our overriding objectives.
This work should signal clearly that we are prepared to make the tough decisions about which services to discontinue from next year onwards.
The absolute top priority services for protection will be social care for older people and children and essential environmental services such as refuse collection. But even in these areas we are ready to redesign services to achieve results at less cost.
The need for modernisation and a responsible approach
But Lord Mayor, let me be clear. We do not pretend that all our buildings, some of which date from Victorian times, can be preserved forever in their current form. We need to think about services and the outcomes we are trying to achieve, not just the buildings we currently use.
Times change and so do people's needs. New technologies give us new ways of meeting those needs. Rather than trying to hang on to all of our facilities and services we should focus on what we are trying to achieve with the declining resources provided by government.
Our approach - the responsible approach – is to modernise our services, preparing for the challenges of the future within the resource constraints we face today.
So we are open to new ways of providing the learning and information services in our libraries and neighbourhood advice centres and we want those services to work more closely together. We have welcomed the proposal from library staff themselves that we should explore the option of creating a mutual organisation to provide community libraries.
If we close down debate because we fear to close any facilities, we will also miss opportunities to provide a better service in a different way. And then, when the government takes away the money, we will be left with no service at all.
The same applies to our sports and leisure services. Our modernisation programme will re-focus the service into health and wellbeing centres supporting better health in the most deprived parts of the city. At the same time a £36m investment by the City Council and Sport England will see six brand new sports and swimming facilities provided across the city by 2018. Are there any other English cities that can claim to be transforming in such a dramatic way sport and leisure facilities? I doubt there are!
We have again looked for savings in support services rather than the front line, including the largest single cut of £20m from the Service Birmingham contract and reducing the council's energy bill by a further £1m by 2018.
The service review process has ensured that, wherever possible, we have made savings through modernisation - doing things differently. For example we will save £5.9m by transferring care of the elderly to a home setting.
Nevertheless, because of the scale of government cuts we will have to reduce our staff by a further 1,000 during the year - having already reduced staffing by a third since 2010. And we have had to make real cuts in frontline services that we would also rather have avoided.
- District savings of £5.9m and £8.7m in subsequent years
- Savings of £100,000 in events and marketing, rising to £1m in 2015-16 and £1.6m by 2016-17, making it harder to support inward investment and the promotion of our visitor economy
- Eventual savings of £12m in core education.
And, Lord Mayor, given the pressure on our services we have decided that this year Council Tax payers will have to make a slightly larger contribution to funding local services. After three successive years of Council Tax freeze, we are proposing to increase the Council Tax by 1.99%. In the circumstances, we believe this is a fair decision and the right balance to strike. It was also supported in our consultation, with two thirds of respondents to the online survey wanting an increase, including a fifth wanting an increase of more than 2%.
Prospects for 2015-16 and the unfairness of the cuts
Lord Mayor, everyone in this chamber needs to be aware that next year's budget will be even more challenging. It will be more challenging because we have already reached the point of cutting front line services. But it will also be more challenging because the cuts will be bigger still.
We currently estimate that the gap we have to close in 2015-16 will require us to find £159m of new savings - nearly double this year's total.
Across the country, councils are beginning to realise that next year really is the crunch point at which many will struggle to maintain adequate statutory services let alone discretionary functions.
And of course the pressure on some councils such as Birmingham is all the greater because there are some - in the South and South East – that will be receiving a much smaller share of the cuts.
Birmingham will see a fall in Spending Power of £147 per dwelling in 2015-16, compared to the national average of just £45 per dwelling.
Unbelievably there are also many better off areas that will receive an increase in spending power in 2015-16. Surrey will get an increase of £50 per dwelling, Buckinghamshire £39, Windsor and Maidenhead £41 and Wokingham £55.
Wokingham, by the way is the second least deprived district in the country, which is why I keep referring to it.
In a recent debate Eric Pickles pointed out that “Newcastle has a spending power per household of £2,522, which is well over £700 more than the £1,814 per household in Wokingham”.
What he neglected to mention was that Newcastle has 101 looked after children per 10,000 population whereas Wokingham has 24.
Making equal cuts in grants does not lead to a fair outcome because different places get very different proportions of their income from grants and council tax.
If we carry on with this approach to cuts the Spending Power per dwelling in Wokingham will overtake that of Leeds this year, that of Sheffield in 2017 and that of Newcastle in 2019.
No one can seriously argue that that is either fair or sensible. Surely Mike and Paul, you can agree!
Already this year we are beginning to see more clearly the pain these cuts are causing, right across the country.
A recent survey by the Municipal Journal found that 37% of council leaders and senior managers now think that their authority will be in danger of failing to provide statutory services.
The same survey showed that a staggering 89% now think the local government finance system is not fit for purpose.
Lord Mayor, let me illustrate these fears with a few stories from right across the country.
In our own city region, Wolverhampton is having to cut £60m and shed 2,000 jobs. Council leader Roger Lawrence has said “we're making cuts we wouldn't want to make in a hundred years”.
Walsall is looking at cuts to children's centres, school crossing patrols and school travel services and closing its museum. In Dudley cuts of £60m over three years will mean reductions in parks and grounds maintenance and arts budgets. In Sandwell 2,500 staff have been lost with another 500 to go in the next few years. Coventry is losing a further £8m this year and £15m next year with 150 job losses.
In other towns and cities, Middlesbrough is cutting by £15m and losing 600 jobs. Salford is cutting £26m, including cuts to mental health, homelessness, Connexions and youth services.
1,200 jobs will go in Doncaster as they make £110m of cuts including ending funding for leisure services and closing down 70% of their buildings.
Bradford is losing 600 jobs as it cuts £115m over three years, including closure of public toilets, children's centres, youth services and the mobile library service.
Hull is cutting by £42m this year. Deputy Leader Darren Hale said
“It’s just tragic, far worse than anything we experienced in Margaret Thatcher’s period. It’s unprecedented. You’re talking about a dramatic reduction. As a rule, we will be doing 25 per cent less of everything.
“Everything is up for grabs. I don’t think there’s anything that’s protected. We’re having to look at everything from children’s services to leisure and library services.”
The need for a bigger plan
Lord Mayor, as I have said many times before, the scale of the cuts we are facing means that this decade ahead will be a period in which local government in this country is literally reinvented. It will be looked upon as “the end of local government as we know it”.
So we need a bigger plan beyond changes to individual services. An outline of this plan was set out in the Leader's Policy Statement last year and it was developed further in the White Paper we published in December, building on the findings of last year's service reviews.
We called it a “new model for city government” and “triple devolution”.
More detail on how we will take forward that plan will be included in my Leader's Policy Statement in June.
But I want to spell out today how radical that plan could be if we can implement it fully in the years ahead.
At the city region level we would work together with our neighbours and invest a five year devolved single funding pot of several billion pounds in transport, skills, housing and economic development.
Infrastructure projects would be brought forward quickly and prioritised according to local needs. We would work with business to identify those needs and to leverage further investment.
At the city level five year “whole place” budgets would enable us to integrate local services and allocate resources to achieve the best outcomes for every pound spent. And we would be able to invest in prevention and achieve huge savings in expensive, acute services.
One of the great tragedies of the cuts is that councils are having to make changes that will lead to more acute needs further down the line - shunting costs from one part of the public sector to another. Nowhere is this more obvious than in health and social care.
Under our plan, health and social care should be a single integrated service under local accountability.
Our Birmingham Education Partnership will develop its own support services and ensure that schools can collaborate to improve.
We will join up services around “whole families” and the “whole person” so that support to children, young people and their families is focused on their needs rather than the many different organisations involved.
At the neighbourhood level will we also focus on the “whole place”, designing “neighbourhood services”, not “environmental services” or “housing services”. We will explore new roles for housing associations and enable community organisations to make a greater contribution. Some traditional services will cease or change fundamentally, but we will design new services to better meet needs.
Our three new directorates - Economy, People and Place - will initially be more concerned with one of these three levels each. But as the role of the council shifts further away from direct service delivery all three directorates will work together to ensure that all levels of city government are joined up and that everything we do includes elements of economy, people and place.
We are working with all the political parties to take this agenda forward. The government has said that it wants to go further with the Heseltine agenda and City Deals and Labour's shadow business secretary, Chuka Umunna said recently that “if we want to truly liberate our cities so that they can fulfil their economic potential, we have to go faster and we have to go further.”
The £3.8bn Better Care Fund to enable better alignment between health and social care is welcome, but we need to go much further to pool NHS and social care budgets and Birmingham is committed to achieving that. The Oldham commission, reviewing this issue for Labour, which included our own Peter Hay, will report shortly. We will call upon all the political parties to put decent social care at the heart of their manifestos for 2015.
And we must ourselves be more radical in devolving to our local neighbourhoods. As we take forward the review of governance in Sutton Coldfield, called for by Sutton residents, we will also be reviewing our governance arrangements across the city to see if there are ways of taking our localisation and devolution strategy further in the years ahead.
As we radically reform the pattern of local services and change the role of the city council we also need to ensure that our governance arrangements will continue to ensure democratic accountability and support community empowerment.
Call for honesty and cross-party working
Lord Mayor, we have been honest with the people of Birmingham about the scale of the challenge we face and the difficult decisions we must take, now and in the future.
And today I want to call upon all parties in this chamber to be equally honest about this year's budget and those we must set in the years ahead.
Let us not hear any fantasy savings proposals or easy options from the opposition parties during this debate. Believe me, if there were any easy options we would have found them in the last year!
Let us not hear calls for the blanket protection of local services - especially from the two parties whose government are imposing on us the biggest cuts in funding in living memory!
And let us not hear any nonsense about setting illegal budgets or planning for smaller cuts because may be things won't turn out as badly as we fear.
Instead let us agree that we are facing a financial crisis in this City Council that is not of our making.
Let us work together to campaign for the changes we need.
Let us work together to stand up for Birmingham and demand a fair deal for our city.
Since the coalition came to power in Westminster, we have now had two years of government cuts implemented locally by the Conservative- Lib Dem administration, totalling £275m and a further two years of cuts under this administration totalling £187m.
As I have said before, if we are honest, we will all admit that we have had to make difficult decisions, for example reducing street cleaning or funding to the arts.
I hope that all parties here in this council chamber now recognise that these cuts pose a serious threat to our public services from next year onwards.
This was demonstrated when we saw all-party support for the motion on the cuts this Council agreed in January and the motion on Standing up for Birmingham agreed in December.
The subsequent meeting we had with the local government minister Brandon Lewis was positive because he recognised that we had come together as a cross-party delegation and we were not just playing party politics.
Liberal Democrat MP John Hemming summed up our case himself when he called for an “equality of pain” in implementing the cuts.
As a result of working together the minister agreed that our officers should meet with DCLG officials to go through the numbers and this will happen in the months ahead. Following that, I hope, I will be leading another cross-party delegation to meet with him and discuss the government's response.
We have put to the minister a simple proposal to make the cuts fairer. When reductions in funding are calculated income from council tax should be taken into account, so that every council received the same percentage reduction in spending power.
But we have more ideas we would like to discuss.
And we want a discussion with cabinet level ministers on the whole of our reform agenda. We will have that discussion with the political parties in terms of the 2015 election as well.
So, Lord Mayor, that is our response to the challenge facing this city.
We will budget responsibly.
We will prioritise services to the most vulnerable and fight hard to protect people from the impact of cuts and benefit changes.
We will be open to new ways of doing things and invite others to come forward with new ways of delivering services.
But we will also stand up for Birmingham - inviting all parties to join with us to campaign for a fair deal for Birmingham and for the changes we need to put local government on a secure long term footing.
Those of us engaged in this year's budget process are already weary from the struggle to identify the least damaging ways to achieve these massive cuts. But we are ready to go on with that work because we have been elected to take responsibility for this City Council.
I am offering to work on a cross-party basis to take on this challenge and to secure the widest possible support for our campaign.
Members of this council must ask themselves what they have to offer to help the city through this crisis.
The changes we need will involve working together, not in silos. We must help “whole people” not just deliver separate services to “service users”.
We must serve “Whole places” through integrated neighbourhood services. We must invest in things that reduce need and prevent expensive crises and we must empower people to take more control over their lives.
It can be done.
This Labour administration has been forced by government to introduce cuts of £187m over 2 years. In spite of this we have:
- Introduced the Living Wage for all council employees and a Business Charter for Social Responsibility, designed to drive the Living Wage through the supply chain and to help make Birmingham a Living Wage city.
- Continue to provide 100% support with Council Tax costs for low income families with children under the age of 6.
- Launched Birmingham Fair Money - providing access to affordable credit via the credit unions, together with debt advice and support for hard working families.
- Taken action to deliver jobs, including the Birmingham Youth Jobs Fund and the expansion of apprenticeship opportunities for young people across the city.
- Developed the Birmingham Baccalaureate.
- Secured a Birmingham Education Partnership to create an umbrella organisation across Birmingham schools.
- Established local Parent Partnership groups where parents of children with special educational needs can come together to discuss issues which affect them as a group.
- Provided an additional £9.2m of funding for children's safeguarding services in the 2014-15 budget.
To achieve that we in this chamber must all work together, we must Stand up for Birmingham and make all the political parties in Westminster listen to the changes we need.
I am determined that we will work with anyone and everyone in the city and with the government and the political parties to bring about the change we need in the years ahead.
The change we need to maintain decent public services in our city.
The change we need to support growth and jobs and create a prosperous future for the people of Birmingham.
The change we need to protect the most vulnerable and the most deprived of our fellow citizens.
As Henry Ford said, “Coming together is a beginning; keeping together is progress; working together is success”
Let us come together as a City Council and work together as a city to achieve the change we need.
Let us all stand up for Birmingham! I commend this budget to the Council. Thank you.