Devolution by all means… but ‘follow the money’

Money  409

Will Birmingham City Council keeping a closer eye on its annual £2 million Community Initiative Fund than it did on Community Chest? Let's hope so

There was a warm glow in the meeting room at the Alexander Stadium, bolstered by the rain and wind lashing the car-park outside. Around the hot water urn councillors, officers and community activists chatted over hot drinks and croissants.

It was early December 2015 and despite it being my first time at the Perry Barr District Convention I knew many of the people and organisations in the room. They were there to be briefed on issues affecting Perry Barr: to ask questions, share ideas or give reports.

Perry Barr is one of 10 districts in Birmingham, based on the parliamentary constituency of the same name. Within its boundaries are four wards: Handsworth Wood, Lozells & East Handsworth, Perry Barr, and Oscott. It has a population of about 110,000.

According to the
Perry Barr District Profile 2014/15 residents believe the top three challenges facing the District are helping people to find jobs, providing high-quality public services and providing more affordable housing. As elsewhere in the city, they think the number one issue needing improvement is street cleaning.

Among the topics discussed at the convention were community safety, homes and neighbourhoods, jobs and skills, young people, and health and wellbeing. All of these were set in the context of the legislative and funding changes affecting Birmingham City Council (BCC), as outlined by its Service Director Districts, Ifor Jones.

As for the context, perhaps the wind and the rain were an omen. Everyone at the district convention knew that BCC has to find a further £250+ million in ‘savings’ over the next four years (2016/20). This was made clear three days earlier, when BCC launched its
2016+ budget consultation. It was reaffirmed at BCC’s annual budget meeting in March when Council leader John Clancy outlined cuts of £88m for 2016/17 and further cuts of £163m by 2019/20.

Triple Devolution

Cuts on this scale have obvious implications for Perry Barr residents and for community-based organisations like those represented at the convention. Since 2010 the latter’s financial plight has steadily worsened. The days when councillors in each of the wards had an annual community chest fund of £100,000 to distribute are long gone. Today the best they can offer is a weary smile and a promise of better days to come.

Now it seems their long wait may be over thanks to
'Triple Devolution'. As the name suggests this envisages decision-making taking place at three levels: the Region, the City and the Neighbourhood. Among BCC’s core pledges is that it will ‘devolve power and resources’ to local areas. There was even a reference to it in Clancy’s budget speech.

Describing the future shape of BCC he said:

‘…we need to make changes at all levels of local government at the same time – from the city region to the city and down to our local neighbourhoods.  

‘We need a radical new approach to devolution within the city, based on bottom up collaboration with communities and neighbourhoods. It must start with the residents and the community not with the structures or budgets of the city council.

‘I hope to bring forward plans for that new approach in the next month or so, following engagement with all three party groups, and to then take those ideas out to the community for further dialogue.’

District Committees

So why doesn’t talk of a ‘radical new approach to devolution’ thrill me? In the past Birmingham’s Triple Devolution model invested decision-making powers not in ‘residents and the community’ but in their elected ‘representatives’. To date this has been tried and tested at two levels: the district and the ward.

Following Labour’s victory in the local elections in 2012, BCC gave greater responsibility and financial control to its 10 District Committees. The idea behind it was that service delivery would be more responsive to local needs. This was coupled with the belief that devolution would help identify potential savings through improved efficiencies and locally agreed cuts.

But the ‘independent’ Kerslake review of the governance and organisational capabilities of BCC drew a largely negative balance sheet of Birmingham‘s model of devolution and of the role of District Committees in particular. Its report, published in December 2014, describes the former as ‘confused’, ‘difficult to understand’ and ‘not financially viable’. As for the latter, it had this to say:

‘Our view is that the current arrangements in Birmingham are not sustainable for two reasons: first, because the management and delivery of services by District Committees is neither efficient nor effective [my emphasis]; and second, because the city’s growing population will mean Birmingham’s wards become too large for effective and convenient local government.’

I’ll return to the issue of ward size at another time; here I would like to concentrate on Kerslake’s first point.

We should start by recognising that Kerslake’s concerns about BCC’s efficiency and effectiveness aren’t measured against its ability to meet the identified needs of its residents – that would be taking the label of ‘independent’ too literally. On the contrary, the review is the progeny of the post-2008 austerity agenda, which requires BCC to implement the government-imposed cuts described above. When planning in an age of plenty locally devolved decision-making has obvious advantages; when planning in an age of austerity there is the risk that elected representatives will struggle to cut services they once fought to establish and on which the electorate depends. As the Kerslake report says:

‘District Committees have not been able to maintain financial control. There were significant overspends in District budgets on sport and leisure services for several years. The cumulative overspend balances across all Districts totalled £8.4m at the end of 2011/12.’

It’s outcomes like these that led Kerslake to question BCC’s ‘effectiveness’, especially when faced with further cuts and the consequent cull of neighbourhood-based officers. As the report notes the discretionary element of District budgets shrank between 2010/11 and 2014/15 from £46.7m to £24.9m, a decline of 46.6 per cent. Over the same period the officer headcount assigned to District Committees fell from 900 to 358 with half of the District Managers posts filled on an interim basis and one of them working part-time. Kerslake concluded:

‘The council clearly faces a tension between the desire for local control and its budget. It has argued that devolution could bring benefits of reducing service costs and improving responsiveness to local people. However, we have not seen any evidence of this and consider it to be a very high risk strategy.’ [my emphasis]

Indeed, at District level the Kerslake report proposes [Recommendation 7] that,

‘District Committees should not be responsible for delivering services or managing them through Service Level Agreements. Instead, if they are to be retained [my emphasis], they should be refocused on shaping and leading their local areas through influence, representation and independent challenge of all public services located in the District, including those of the council.’

With regards to funding it adds,

‘Districts should be provided with a modest commissioning budget to purchase additional services that help meet local priorities. Services commissioned will not necessarily need to be managed or provided by the council. They will need to effectively manage their own finances and meetings must be open to the public and outside of the town hall.’

Community Chest

The second example of locally devolved budgets, which is less significant financially, is Community Chest.

Sadly, Kerslake didn’t examine this area of BCC’s spending, focusing instead on ward boundaries and the election cycle. That he did so is probably a blessing for BCC. Over the years Ward Committees have been entrusted with millions of pounds of public money to support organisations and projects. While I have no doubt many decisions were judicious the system was also ripe for abuse. While on paper it was Ward Committees that decided who got what, in practice it was councillors who made the decisions. Projects that met with councillors’ approval received generous year-on-year funding; those that didn’t had to look elsewhere.

I have written
here about the way in which Community Chest was dispensed in Handsworth Wood, where I believe the facts speak for themselves (at least for those willing to listen). The need to challenge these practices receded as Community Chest was gradually cut back, first to £50,000 per ward in 2013, before eventually disappearing altogether. Reluctantly, I found myself supporting these steps as every effort I made to argue for a more equitable distribution of funds brought little but hostility. Nor, was the issue just about money. Inequitable funding fuelled cynicism and resentment in Handsworth Wood and undermined community cohesion, a concern that clearly didn’t bother some of our ‘representatives’. Sadly, while officers were aware of the problem they seemed powerless to stop it. Who, after all, was going to stick their neck out when local authority jobs were disappearing hand over fist and the Council’s elected leadership was at best indifferent and at worst sanctioned what was going on.

No going back

So why raise this issue now? Because BCC has a new leader who seems even more committed to devolution than the last. If he is true to his word then we are about to embark on yet another attempt at the Triple Devolution model. I previously took comfort in the fact that Kerslake’s view of devolution at Neighbourhood level emphasised community engagement and empowerment rather than funding. However on page 46 of the
Business Plan and Budget 2016+ there is mention of an annual £2 million Community Initiative Fund, ‘which will provide resources for locally-determined [sic] spending priorities’.

I assume this is the ‘modest commissioning budget’ for district committees suggested by Kerslake, in which case why complain. With £200,000 a piece no doubt some district committees will do some good. But I have yet to see how this money will be distributed and more importantly who will decide how it is spent. Perhaps these are among the ‘ideas’ that Clancy intends to take ‘out to the community for further dialogue’.

My obvious concern is that for some of our local councillors it will mark the return to the good old days when like feudal lords they lavished largesse on their loyal vassals while condemning others to penury. In an age of austerity when the public rightly insists on transparency and accountability there is no excuse for not having unassailable measures in place to ensure that every penny is spent wisely and without patronage. Can BCC guarantee this? I hope so, but my advice to community groups and activists is ‘follow the money’. In the words of the campaigning journalist Jon Stewart, ‘The best defence against bulls*** is vigilance.’

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