Statement to City Council

Statement to City Council

16 September 2014

Lord Mayor, I would like to make a statement about the financial situation facing the City Council and the implications for our staff and for our services.

I am taking the unusual step of making this statement ahead of the consultation on next year’s budget because I want the people of Birmingham to be in no doubt and under no illusion about the grave challengesahead.

The ticking time bomb on human resources

Colleagues, there is a ticking time bombunder this City Council. Over many years we have not given enough attention to how we manage staff reductions and plan the workforce we will need in the future. If we don’t act now then the consequences will be catastrophic for the future functioning of this organisation.

Three key issues are calling for our attention.

Firstly,the cuts will mean a continuing reduction in employee numbers. Already our workforce has declined from just over20,000full time equivalents to around 13,000. By 2018 we estimate that numbers will have to fall to around 7,000. Our core workforce could be even smaller than that, because some of that 7,000 will be employed by arms-length organisations.

This means we will be operating with a workforce less than one third the size of that in 2010 and one half of what it is today – the equivalent of taking out twice the workforce that lost their jobs at Longbridge in 2005

Lord Mayor, I want members of this council and the people of Birmingham to reflect on that stark fact and think about what it means for how we operate in the years ahead. Clearly we cannot continue with anything like the range of activities we have delivered in the past. Too often we operate as if we had exactly the same resources as before and we often expect the impossible from our staff – this cannot continue.

The simple fact is that we cannot do all that we have done in the past with two thirds, let alone one third of the staff. So, in future, when we,as councillors,receive requests for action from the public, we must think of the reduced resources we have and the pressure that people are operating under. Sometimes we will have to explain to people that we’re sorry but we just don’t have the resources to do what they are asking.

Secondly, there is a growing imbalance in the age profile of our workforce. We currently employ just 36 people under the age of 20 and 3,700 under the age of 40. But we haveover 12,500 people between 40 and 69 years old and 166 people over 70. Whilst the city has a growing young population, the council is not doing enough to employ this age group and we need to restore this balance.

Finally, the council has a huge task to reshape services and we will need staff not only to stretch their professional expertise, but to develop a broader range of skills. Just being a good professional in their field of expertise will not equip people to operate effectively in the future.

In many cases the transition will not be an easy one. It will require retraining and significant amounts of energy and drive.

This energy and drive will be vital to the future success of this council, yet the challenge comes at a time when many of our workforce are tired and disillusioned. They are, if you like, the silent victims of the government cuts.

The process of engaging with staff to meet these challenges has already begun. The Deputy Leader and I have held many “Listening Leadership” meetings with staff groups. The Chief Executive has carried out his “Big Conversation” events.

But Lord Mayor, I am now throwing down the challenge to this council to give these workforce issues the priority they deserve.

We must resolve difficult issues to do with how we carry out the further reductions in staff numbers that will be needed and how we will ensure that we have the right people in the right place doing the right things.

And we must put in place the right support to enable staff to get through these changes and to develop the new skills they will need, whether they stay with us or start new careers elsewhere.

I have now asked officers to prepare a full human resources strategy to address these questions and to ensure that for the first time the City Council has a proper plan of action for one of our most important assets: our people.

Staff and the trade unions will of course be consulted in full on this strategy. Indeed, I am meeting with the trade unions first thing tomorrow morning.

The information campaign

Lord Mayor, today we are launching an information campaign to ensure that everyone in this city is aware of the stark choices we face in the years ahead.

In addition to the impact on our staff, there are four other key facts we want people to know.

Firstly the cuts are the result of the unfair distribution of austerity measures across public services. It has been estimated that over 50% of the cuts have fallen on local government and welfare benefits.

Secondly the government has distributed this cut unfairly between different parts of the country, with the most deprived areas receiving the biggest cuts.

This will mean a £147 per dwelling cut in Birmingham’s spending power next year, compared to the national average of just £45. Incredibly, some places such as Buckinghamshire, Windsor and Maidenhead, Hampshire and our old friend Wokingham will actually see an increase in spending power next year.

Thirdly, we are reliant on central government for 67% of our spending. The Council Tax provides for just 8%. So, when the cuts come, we are more vulnerable.

Finally, the cuts in funding combined with increased spending pressures mean we will have made cuts of over £800m by 2018 – equivalent to over 60% of the controllable budget. In the next year alone we must find around £200m, on top of the £460m already cut from our services.

Far from austerity being over, as some seem to believe, this is the biggest cut in mainstream funding we have seen so far. And the cuts are planned to continue for at least three more years.

Since wemet with the local government minister as a cross party delegation in January, our officers have put several detailed proposals to DCLG officials about how the cuts could be delivered more fairly.

But in the end we were told last month that the government will not be making any adjustments to next year’s settlement.

Let no one say that we didn’t make the case for a fairer deal for Birmingham. The Government is simply not listening.

The process for this year and the need for a clear plan for change

We have been conducting a further intensive service review and prioritisation process since the spring. The outline conclusions of that process and our overall plan for change will be published in a green paper next month. This will give the people of Birmingham the opportunity to comment on the overall direction of change.

Our detailed budget proposals for 2015-16 will then be published in December for formal consultation.

By making this statement today I am being very clear about the reality of the stark choices we will face.

But we also need to be clear that we will get through this period, as a city and as a council.

We must set out a bold but responsible and achievable plan for change in the organisation so that all our staff can see the direction in which we are going and understand our values and priorities and the skills and behaviours we will expect in the future.

We will develop further our “new model of city government” – the so called triple devolution approach. And we will use the feedback from the Big Conversation and our Listening Leadership meetings to ensure that the ideas and views of staff are reflected in the future role and purpose of the council.

You know, one of the great tragedies of these cuts is that they come at a time of great economic opportunity for Birmingham.

When I look at the City of Birmingham I do not see the tired stereotypical picture painted by certain lazy London commentators.

I see a city and a region on the verge of a new boom in manufacturing, with record inward investment and exports.

I see a city of dynamic entrepreneurs and creative young people.

I see a year ahead in which major infrastructure projects will come to fruition and a previously unknown level of investmentwill take place.

And looking ahead I see the huge opportunity of our role as the hub of the new high speed rail network and our determination to grasp that opportunity through the Curzon Master Plan andthe HS2 Growth Strategy.

Birmingham has never lost its culture of enterprise and invention.

And Birmingham City Council will not abandon its role of supporting economic prosperity.

When I look at the City Council I do not see the dysfunctional organisation some would have us believe it is. Despite our undoubted challenges in some areas, I see many remarkable groups of dedicated, hard-working public servants who are passionate about their city and working desperately hard to provide the services they know the people of Birmingham deserve.

It is that commitment and dedication that tells me we have a future. A different future, but a positive future.

The next few years may well see “the end of local government as we know it”. But it will not be the end of local government.

The responsibility of councillors

During the process ahead I would welcome any ideasfrom members – Labour, Conservative and Lib Dem - about how we can radically change this city council in response to the scale of the cuts.

But I will not welcome proposals involving fantasy budgets or unrealistic savings that cannot be delivered.

And the people of Birmingham will not welcome cynical election stunts or hypocritical campaigns run by those who know full well the scale of the challenge we face.

The crisis facing the city council and the people who depend on our services is very real. The people of this city will look to all of us for leadership and responsibility at this time.

Conclusion

Lord Mayor, in conclusionthere is no getting away from the reality of the funding cuts ahead.

Our employees are facing up to the scale of this challenge right now. I would ask every councillor in this chamber to face up to their own responsibility as well.

The years ahead will be some of the toughest this City Council has ever experienced.

But by working together as a council and a city we will get through it.

We will be a much smaller organisation, but I am determined that we will emerge as a council that continues to provide the leadership and the vision that this city deserves.

We will be a council that employs a diverse and dedicated team of staff able to work in new ways to achieve our goals for the city.

And we will be a council that continues to honour the motto of this great city by looking forward to a new and better future.

Thank you.

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