The Chamberlain News

Promises and performance: Clancy’s half year progress report

It will be six months on 1st June since the tectonic plates underpinning Birmingham city council snapped apart with the election of a new Labour leader, John Clancy, who replaced Sir Albert Bore. Chamberlain News’ chief blogger Paul Dale reflects on the new regime’s performance so far.

Unusually in the recent history of Birmingham city council, John Clancy’s pitch for the top job was at least five years in the making and accompanied by a detailed manifesto setting out what he hoped to achieve.

The openness of Clancy’s policy programme – containing plenty of potential hostages to fortune – was in stark contrast to the determination of the West Midlands Regional Labour Party to close down public debate over the leadership election during November 2015, although officials were finally forced reluctantly into conceding a hustings event.

Clancy’s number one objective, which if not achieved could have prompted the shortest council leadeship career in history, was to persuade the Birmingham Independent Improvement Panel that the culture change at the Council House set out in the Kerslake Review and embraced by the Government would be given the utmost priority.

The panel spent most of 2015 warning that the council, under the leadership of Sir Albert Bore, simply did not understand the need for change. Communities Secretary Greg Clark made it clear that further intervention might be necessary and did not rule out the possibility of Government commissioners being sent in to run the council.

Supporters of Sir Albert Bore, for their part, lost no opportunity to paint Clancy as a dangerous radical with no executive experience, a novice in fact, who would drive Birmingham into the arms of the commissioners.

That was the backdrop to a rather nasty Labour leadership election. It was inevitable, given the mudslinging and insults flying around, that the regional office would be keen to keep their dirty washing out of sight.

In the end Clancy won by just one vote with Penny Holbrook, the de facto Bore candidate, coming second with a surprisngly strong performance.

The narrow margin of victory meant that the new council leader had to concentrate on holding the Labour group together and any sweeping cabinet reshuffle would have to be postponed until after the May 2016 elections. This strategy attracted unexpected and unusual backing from the improvement panel.

When the reshuffle did take place, Cllr Holbrook found herself dumped out of the cabinet. Accounts differ as to whether she was offered and refused a portfolio. The council leader took the opportunity to promote two key allies to the cabinet – Waseem Zaffar and Majid Mahmood.

The first three or four weeks of Clancy’s leadership were crucial in persuading Mr Clark that the new leader really did ‘get’ Kerslake and would accelerate the pace of reform. Giving a clear signal to others, Clancy met Clark and Lord Heseltine almost immediately after taking office, as well as the improvement panel chair, John Crabtree.

Mr Clark appeared to be satisfied, and the panel agreed to step back for a few months to allow Cllr Clancy and council chief executive Mark Rogers breathing space to push forward with change, primarily better partnership working and the involvement of all councillors, regardless of party affiliation, in policy development.

Lurking in the background, of course, remains the desperate plight of Birmingham children’s social services. Clancy, with his ‘every child matters’ mantra, has promised to do everything possible to move the department out of Government special measures and to make sure children in Birmingham are safe. Plans are afoot to transfer the department to a trust.

In his first meeting with Rogers after becoming leader Clancy took the bold step of announcing that the chief executive and his officers were to run the council, while Clancy concentrated on being “one of Birmingham’s leaders”.

Since December Clancy has embarked on a relentless round of public engagements, routinely captured on social media in a culture of openenss entirely new to Birmingham council. He has attempted to mend bridges with the business community in particular. The improvement panel’s next report, due in the autumn, will doubtless comment on whether the new leader has been successful in repairing the council’s poor reputation for partnership working.

The policy programme that delivered the leadership to Clancy had the title: Every Child, Every Citizen, Every Place Matters, with a sub-heading of: Tough decisions, while building hope.

Here then is what was promised, and what has been achieved in the first six months:

Immediate zero-based budget review to address severe cuts to revenue in particular over next 2 years. Where nothing is ruled out and everything is on the table. We have to decide what we can afford. We haven’t done this at all properly yet. All contracts, all books will be given over to our, and the public’s, immediate scrutiny so we can balance the books together.

The immediacy was scaled down straight away when it became clear to Clancy that he would inherit a budget for 2016-17 from Sir Albert that was already in the final stages of preparation. There simply wouldn’t be time to make many changes other than tinkering around the edges. The improvement panel made it pretty clear that Sir Albert’s budget would have to suffice. Next year, 2017-18, will be the first opportunity for a zero-based approach, although there are no signs yet that this will happen.

The Capita-Service Birmingham Contract will have to go: in its current form there is effectively a protected £80-100 million a year department. This is simply no longer the kind of spend we can contemplate when we have to take tough decisions elsewhere. We will offer the contract out at a price we can afford at a fraction of the current cost. We should look to our own West Midlands firms to do our IT.

A very bold claim designed to play directly to backbench Labour councillors who had become increasingly concerned about the financial strain of the Capita joint partnership. Clancy’s plan had been rubbished by Sir Albert and his backers who warned the compensation payable to get out of the Capita contract would far outweigh any savings. Talks are continuing at the highest levels between the council and Capita in an attempt to broker some sort of deal that will deliver substantial savings on Service Birmingham costs. Clancy says he is playing hardball.

Challenge the £45 million extra top-up payments each year to the Local Government Pension Fund when it has now revealed it pays £90 million a year in investment management expenses. We will challenge and decline to pay those unnecessary top-up payments each year for the next few years and ask for a refund. Why ask the West Midlands councils for top ups of £100 million extra a year when they can find £90 million for investment expenses? Our huge pension contributions as employers of hundreds of million pounds for all employees will be met fully and with pride. Unnecessary top-ups will not.

The tide of events has opened up promising ground here for Clancy. The Government has seized on Clancy’s own research into the scandalous costs of running local government pension funds and is looking to reduce almost 100 funds to about five or six, using their investments to boost economic development and build homes.

The £20 million Library of Birmingham financial headache must be resolved immediately – our library must become an asset, not a drain on our resources. We must look to radically reset the asset within an investment asset base and extend the involvement of partners, especially our great universities in its running.

Some progress has been made with space in the library being let to other organisations, enabling the council to increase opening hours. Discussions are under way about forming a trust, possibly in partnership with the universities.

A City Region Sovereign Wealth Fund – this would use our £5-6 billion physical asset base to generate capital spend in building housing, and investing in business, jobs and infrastructure across all wards of the city, to generate economic growth city-wide. We must use it to ensure thousands of affordable homes are built each year over the next decade in this city. The uplift from growing our economic base, especially in the context of retained business rates, would be kept by the city itself, helping our revenue position medium to long term as well. It will fight poverty at its roots.

This again is an idea that potentially has the Government on side. The complexity of such a task means, however, that solid progress is probably some way away.

Making the city region, combined authority and devolution deal work. Initial investments via Birmingham Municipal Bonds, a Birmingham Municipal Bank, Asset Backed Vehicles, Real Estate Investment Trusts would be the starting blocks to creating a much bigger wealth fund at regional level to generate revenue and add to and enhance the asset base and invest in skills. We must work with the combined authority to enhance the current devolution offer with a regional wealth fund at its side. The city’s and the region’s vast assets would become part of a triangle of regional wealth which would bring in significant liquid financial investment from the West Midland Pension Fund and others.

This is another big idea that depends largely on getting the Government on board. Clancy is confident of being able to announce progress on municipal bonds and a municipal bank soon. He has held discussions with Communities Secretary Greg Clark about this.

Make Birmingham a free school meals city. After our zero-based budget review we will look to reset our budget to invest first in children, not IT. We will make free hot school meals available to both infant and junior pupils at all of our LEA primary schools. We will then look to make Birmingham a free school meals city bringing in new forms of investments through social enterprise, social impact bonds and partnerships to achieve this.

This was one of Clancy’s most controversial policy pledges, not because it was thought to be undesirable but because it was thought to be unachievable. The council leader has conceded the cost of free school meals, running into millions of pounds, is too great for the council to fund alone. He is looking to establish a free school meals trust.

Tomorrow: the rest of Clancy’s manifesto progress examined.