The Chamberlain News

Ofsted’s savage attack on Birmingham likely to dent investor confidence, business chiefs warn

Business leaders have accused Ofsted chief inspector Sir Michael Wilshaw of denting confidence in the local economy and challenged him to visit Birmingham after he described the city as one of the worst places in the world for children to grow up.

Sir Michael branded Birmingham’s children’s social services department “an absolute disgrace” and likened infant mortality to Cuba and Latvia in a hard-hitting annual report.

He warned that with unemployment at double the national average and widespread social deprivation it was not surprising that children’s services were struggling to cope, adding that Birmingham had been guilty of “failure of corporate governance on a grand scale” for many years.

His attack drew an unusual joint response from the Greater Birmingham and Solihull Local Enterprise Partnership, Greater Birmingham Chambers of Commerce and Marketing Birmingham.

Sir Michael is accused by GBSLEP chairman Andy Street, Chamber of Commerce chief executive Jerry Blackett and Marketing Birmingham chairman Paul Kehoe of misrepresenting Birmingham with damaging remarks that threaten to damage business confidence.

In a joint letter, the three claim that economic recovery in Birmingham is gathering pace more quickly than elsewhere in the West Midlands and that GBSLEP is on course to meet a target of creating 100,000 private sector jobs by 2020.

The three business leaders said they were “dismayed” at Sir Michael’s portrayal of the Birmingham economy as “struggling and without direction” and urged him to come to the city to see for himself.

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The full text of the letter:

Dear Sir Michael,

During the speech you made last week on behalf of Ofsted, you revealed a range of findings in relation to children’s care services across the UK, but particularly within Birmingham.

In addition to the children’s care situation you commented on some of the wider aspects of the local economic picture that we feel require a robust response.

Whilst it is not appropriate for us to respond in relation to Birmingham’s children’s services we recognise that many aspects of the prevention agenda rely upon a strong and prosperous local economy.

Therefore we are very concerned that you painted a picture of our economy which misrepresents the facts and ignores the real progress being made.

As a regional capital Birmingham’s economic footprint extends far beyond its administrative area. There are over 540,000 jobs in the city and 175,000 are taken by commuters from outside its area.

Therefore the unemployment figure of 45,000 (10%) has to be set in a context of an economy that provides over three times more jobs than its own ‘unemployed’ residents require.

By contrast, the figure for unemployment across the wider LEP area stands at 7%. This more accurately reflects the strength of the city’s economy.

There is no doubt that Birmingham and the West Midlands suffered disproportionately from the loss of UK manufacturing jobs, particularly over the past 15 years. Whilst the resurgence of Jaguar Land Rover has helped stabilise this sector, it still amounts to an overall loss of over 90,000 jobs.

Against that background, stakeholders across the region, including Birmingham City Council and its neighbours, have pulled together and are working hard to rebalance the economy.

We have clear strategies and investment plans which build on our strengths, and set out an agenda for our place in the global economy. This includes a specific focus upon equipping the local super diverse population with the skills they need.

It is clear that we are now making decisive progress. The most recent ONS regional accounts shows that in terms of GVA growth between 2010-11 Birmingham’s GVA growth was greater than any other ‘core city’.

Over the same period the Greater Birmingham & Solihull Local Enterprise Partnership area saw the highest number of private sector jobs created outside London, at nearly 20,000.

Likewise, we attracted over 40% more foreign direct investment than any other core city.

The LEP has set itself a series of ambitious targets to both grow and diversify the local economy. We are on target to achieve our goal of 100,000 new private sector jobs by 2020. In an unemployment context, we are currently at January 2009 levels, and in many key sectors such as Business, Professional and Financial Services we are above prerecession levels of employment.

The evidence going into the recession was that we were being hit harder and faster than other regions and the evidence now is that we are emerging faster and stronger than others.

There is also real evidence of much needed investment across the city region, with over £1billion of public sector supported infrastructure works currently underway, and many times that amount invested by the private sector in significant projects: all driving the economy forward.

In this short note we cannot hope to do justice to the work underway and the progress we are making. Needless to say we were dismayed at your broad portrayal to the national and international media of a local economy that is struggling and without direction. We are very conscious that confidence amongst the business and investment community is fundamental to our continuing economic growth.

So, our hope is that you will take a suitable opportunity to visit Birmingham and see for yourself the ambitious plans and programmes which are, and will, provide a successful economy for our citizens.

Yours sincerely,

Andy Street, Jerry Blackett, Paul Kehoe.