Birmingham Airport

Clancy in pledge to slash £80m from council’s Capita paycheque

Service Birmingham deal an unaffordable 'Rolls-Royce' contract, claims Labour leadership contender

By:
Published May 1, 2013, in Politics


rollsBirmingham Council leadership contender John Clancy has likened the city’s multi-million pound ICT contract with Capita as an expensive “Rolls-Royce” luxury that can no longer be afforded.

Cllr Clancy said he would save up to £80 million by renegotiating the deal, or rip the contract up and offer the work to smaller local firms if Capita could not provide a cheaper service.

He is also promising to raise millions of pounds for public services by selling the council’s interest in the National Exhibition Centre, National Indoor Arena and Birmingham Airport.

Capita has been responsible for revamping the council’s ICT programme and call centre since 2005 and led a business transformation programme through joint venture company Service Birmingham.

The council has to pay Service Birmingham about £120 million a year, a sum that Cllr Clancy argues is out of all proportion with the value of the contract.

In his latest policy pronouncements, Cllr Clancy also pledged:

  • A significant planned programme of asset sales, including disposing of the council’s majority interest in the NEC and minority Birmingham Airport shareholdings to pension funds.
  • To establish a ‘Chamberlain Municipal Bank’ to provide and source community finance, basic services and utilities to Birmingham people where the market fails.

Cllr Clancy will stand against Sir Albert Bore for leadership of the council’s controlling Labour group on May 11. Should he win, he will become council leader.

His pledge to renegotiate the Service Birmingham contract may strike a chord with many Labour councillors who have been critical of the cost and value of the deal. Sir Albert is overseeing talks to cut about £20 million from Capita’s costs, but Cllr Clancy believes the figure is far too unambitious.

Cllr Clancy said: ““We cannot afford to be paying a tenth of our controllable budget in providing ICT and business services to ourselves and remaining schools. We have to decide what we can afford and pay no more.

“Service Birmingham should be forced to re-think and restructure the contract to meet our considerably reduced revenue and start again. Otherwise we should offer it to consortia of local SMEs instead who will undoubtedly be able to provide it within our revenue challenges, and enable us to absorb any exit cost.

“I do not think we can afford to pay any more than £40-50million a year through the Service Birmingham contract. We’ve been paying £120million. This is a Rolls-Royce contract formed in another era and it has to go in its present form.

“Again across the piece the private sector partners and contractors have to get real about our revenue situation. They have to cut their cloth to meet our inevitably new, reduced revenues and needs. We can’t afford to continue subsidising the big-business private sector with outdated, win-win contracts for them.”

He would use a structured sale of the council’s sprawling property portfolio to pay down an £850 million equal pay bill, thereby avoiding additional borrowing costs.

Cllr Clancy said: “We own too many commercial assets. We’ve forgotten why we own most of them. It’s a ridiculous thing for us to own literally billions of pounds of assets. In their present form, I say they have to go.

“We have to re-order our whole council away from such asset owning. We need, instead, to convert them into other assets or spending power in the economy that create housing and jobs.

“If we can use commercial asset sales to pay down £billions in debt, we should do exactly that: we should not be sentimental about which commercial assets we sell. And our current plans don’t go far enough.

“We should own buildings for families, homes and services, not commercial buildings. The NEC & NIA complexes and the Airport might better be owned by Pension Funds who would be happy to buy them.

“While the market is poor for sales, in the short term we should look at using asset-backed securities, placing assets into our very own wealth funds to release investment now in local housing, jobs and the local economy.”

Cllr Clancy said a municipal bank would provide affordable services for “ordinary Brummies” who were being excluded from basic services by the big banks.

He added: “I would look to ensure that our Municipal Bank is able to provide basic and enhanced banking services to Brummies to stop them being financially excluded, and to stop them having to pay more than the rest, especially when it comes to the basics like gas, electricity and water.

“I believe that we should look to provide in a range of other areas where market failure means some of the poorest, or all, Brummies get a bad deal. Municipal banking will lead the way and we will also look to provide insurance and savings.”

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Government backs expansion of Birmingham Airport

Aviation framework shows how congested Heathrow can benefit West Midlands economy

By:
Published March 25, 2013, in Politics


planesThe important role that Birmingham Airport will play in providing additional flight capacity and relieving congestion at Heathrow, Gatwick and Stansted has been underlined by the Government.

An Aviation published by the Department for Transport sets out the case for regional airports such as Birmingham to develop new routes and provide an alternative offer to the overcrowded airports of London and the South-east of England.

It supports Birmingham Airport’s planned runway extension and programme to develop long-haul flights to India, China and the west coast of America, which it says will “help boost the West Midlands economy and ease capacity constraints as well as congestion at South-east airports”.

The report underlines Birmingham Airport’s importance to the West Midlands economy as a creator of employment and wealth, and should be seen in the context of proposals for regeneration schemes in the M42 Corridor by the Greater Birmingham and Solihull Local Enterprise Partnership (GBSLEP).

GBSLEP is to bid for a share of a £70 billion Government Single Pot fund to

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Sale of the century revving up for take off

Disposing of city council's Birmingham Airport shares 'not off the agenda' as far as Eric Pickles is concenred

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Published February 14, 2013, in Politics


planesBirmingham council leader Sir Albert Bore may be forced to mount a controversial sale of the local authority’s vast portfolio of commercial property and other assets in order to avoid cutting front-line public services.

A recent private meeting of Labour councillors saw Sir Albert on the back foot having to respond to councillors who want to raise millions of pounds by disposing of buildings and shareholdings, specifically in Birmingham Airport and the National Exhibition Centre.

He said people were constantly telling him to “wave magic wands” and went on to claim that selling £3.5 billion of council-owned assets would raise “only” £200 million, which wouldn’t be a good deal for Birmingham.

Under existing Government rules, councils selling assets cannot use all of the money to run services. They can only use the interest from investing asset sales money.

If Birmingham sold £3.5 billion worth of property and was able to invest the sum at a six per cent return, the council would gain £210 million a year.

However, one councillor at the meeting said: “In a climate where the leader is talking about the end of local government as we know it and of decommissioning whole tranches of services, there are a lot of people who think

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‘We can’t afford not to have HS2′

Transport Secretary backs high speed rail, and demands aviation boost for London

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Published October 8, 2012, in Politics


(Image credit: Getty Images via @daylife)

Transport Secretary Patrick McLoughlin had some good and possibly not such good news for Birmingham when he addressed the Conservative party conference.

On the plus side, Mr McLoughlin underlined the Government’s continuing commitment to building the HS2 high speed rail line from London Euston to Birmingham, a project that will benefit the West Midlands economy by generating new wealth and jobs.

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Cameron’s ‘reverse ferret’ on Heathrow just might be a great opportunity for Birmingham

Aviation commission gives breathing space for BHX campaign

By:
Published September 5, 2012, in Opinion


The Government’s newly announced independent commission to review the UK’s aviation strategy is both a lifeline and a threat to the hopes of those campaigners fighting to move the centre of gravity from the South East to Birmingham and other regional airports.

While the review can justifiably be characterised as a to get the Government out of a political bind, it does at least give BHX boss Paul Kehoe and his supporters the opportunity to restate their case within a formal policy development framework.

Some in Government no doubt have in mind what they believe is the ‘right’ answer, and are hoping the review will give independent backing to a Heathrow expansion. Within the same administration, though, others believe the ‘Boris Island’ option is the best solution.

Therein lies the threat. Viewed from within the Westminster bubble, this is just an issue for the South East. London-centric politicos and media are scrapping over WHERE in the South East any new capacity should go, rather than WHETHER the South East is the only region that holds a solution to a national problem.

And it’s a circular argument which states that because the South East is where most of the international slots are currently, that’s where any future ones should go. This forgets the simple fact that Birmingham’s current and future spare capacity can facilitate a redistribution of slots that takes services closer to more of the UK population while freeing up opportunities in the South East for more lucrative routes to the emerging global markets.

In many other countries, Birmingham’s proximity to the capital would make it a crucial and obvious component of a network of airports. A transfer time of little more than an hour to the capital city or another major airport barely registers for the international business person planning their itinerary. When HS2 is plugged in, Birmingham will be more accessible than ever.

A failure to recognise this is a little Englander attitude that needs to be robustly challenged by everyone who cares about the long term economic health of this region and the whole of the UK. It seems precious few voices are being raised within the South East, so it’s down to businesses, citizens and politicians in the rest of the country to rise to the challenge.

Birmingham and the West Midlands have the most to gain, but we shouldn’t be embarrassed to use regional self interest to argue for what should be a national cause.

After all, London has been getting away with it for years.

Marc Reeves is a partner in RJF Public Affairs, publishers of The Chamberlain News.

  • To download RJF’s latest briefing paper, ‘At the Crossroads – Which way now for transport in the West Midlands?’, click here.
 
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