david baileyBirmingham Against the Cuts should welcome the informed advice of Professor David Bailey (Coventry University Business School), which offers a clearer perspective on the city council’s financial position and on alternatives to ‘decommissioning whole swathes of public services’. He wrote:

“George Osborne’s ‘Plan A’ austerity drive isn’t working. I have repeatedly made my position clear that Osborne should have had, and should now be implementing, a Plan B. So does the IMF and many other commentators”.

After giving the overall figures for the city council’s ‘controllable’ expenditure and the serious future planned cuts to BCC’s formula funding, Bailey points out that, after far larger sums had been predicted, the 2013/14 settlement actually came in at the figure of £31.5 million in revenue cuts: “The reality is that the council is about £8 million better off in 2013/14 than it anticipated just last month and so starts from a higher base cumulatively as a result” adding:

“All of which raises the question: if we couldn’t predict the revenue cuts and costs six months out; why should we trust estimates of them six years hence – well into the next parliament?”

One reasoned proposal offered by Professor Bailey, in response to Sir Albert Bore’s ‘Jaws of Doom’ reaction to a review of the future financial situation he commissioned from the University of Birmingham:

“Realistically the council should only consider the next two years. After then, there can be planning, but it must be on the basis of different scenarios and at least a Plan B (and probably C and D as well) . . . In the meantime, I would like to suggest that the most pressing problem is the huge pressures closing down on the council from factors beyond its core services role.

“One is the council’s Information and Communications Technology (ICT) and public contact system in the shape of Service Birmingham/Capita. It has got to a stage where BCC is spending over 10% of its entire controllable budget on them. That is simply unsustainable. Analysis at scrutiny level in the council has already identified that over £120 million a year goes on this contract, when it was anticipated that it should only be costing the council in the region of £55 million, which is, in any event, too much.

“The council has to decide whether it exists to provide an ICT service to itself and plough a tenth of its controllable budget into it, or is really there to provide statutory and other local public services. The tail appears to be wagging the dog.

“Instead of decommissioning whole swathes of public services, that contract should be brought back in house or other West Midlands ICT businesses should be invited to bid at well below the current cost. The same has to be said with all of the council’s contracts.

“If just the ICT spend of the council can be reduced by £50 million annually in 2014-16, and significant other cuts to the other big private sector contracts are made first, then service reviews of front-line services become much less pressing. They can still be planned for, but left to form part of a new Plan B or C, if the ‘worst’ happens if whichever government returned in 2015 continues to squeeze the revenue as badly as predicted by Sir Albert.”


Read the full article here.

Note earlier references to Capita on this site:
Cllr Henley June 2012
In the outsourcing article May 2011
Backlog Capita/council payments Nov 2011
Mayflex allegation Aug. 2011