Deloitte’s, spin and and the small matter of £250m of cuts

credit: UKuncut action against tax avoidance
(UKuncut action against tax avoidance. Deloitte’s is one of the big 4 accountancy companies advising clients on tax avoidance)

Ladywood residents complaining that rubbish isn’t being collected and Council Houses not being repaired. The Council call centre that still doesn’t effectively respond to residents’ enquiries. The father of a service user expressed concerns of the 40% cut to the Adult social care budget. The impact of the £6m in year cut to public health. These were just some of the public contributions to the Birmingham Independent Improvement Panel (BIIP) public meeting last week.

This ‘high level’ meeting where members of the independent panel scrutinise and question the Leader, Deputy Leader and Chief Executive of the Council exists in parallel to the real concerns of Birmingham residents who ask questions which are never really heard or answered.

The BIIP was set up following the highly critical Kerslake Report into the inner workings of the City Council with the purpose of reviewing work on the Council’s improvement plans and reporting back to the Government. The Kerslake Review which reported in December 2014 was commissioned by Eric Pickles, the previous Secretary of State responsible for Local Government, and found among other things that the Council’s governance arrangements were not fit for purpose and that the Council was failing to adequately plan for the future.

Kerslake was always about the Council managing the imposition of austerity better in the city in calling for ‘effective governance and decision-making arrangements that respond to challenges and manage performance, change, transformation and disinvestment.’

Highly critical of the Council’s short term approach to making cuts over the last five years, so-called salami-slicing, Kerslake called for a more robust approach with longer term financial planning to meet the demands of the next phase of even deeper public spending cuts to be imposed by Central Government. Birmingham Council will be required to make further cuts of the order of £250m by 2020.

Kerslake recommended that ‘Birmingham City Council needs as a matter of urgency to develop a robust plan for how they are going to manage their finances up to 2018/19 without recourse to further additional funding from central Government.’ This plan should ‘evaluate current policy choice and propose significant further reductions in costs and measures to tackle levels of demand.’ (1)

The response of Sir Albert Bore has been to appoint Deloitte’s to act as consultants in developing a bespoke ‘demand management’ approach within the Council. In July the Cabinet allocated £743k to fund this work of identifying and preventing future demand from local citizens upon Council services.

Up to now the Council has cut the costs primarily through staff redundancies but ‘demand management’ is seen as a further step in imposing even deeper cuts to local services. Discouraging people from knocking at the Council door for help, or simply turning them away by restricting who is entitled to what services, are part of this approach. Managing austerity is becoming increasingly defined as a technocratic exercise of managing the behaviours and lowering the expectations of citizens. This what the Local Government Association says:

By changing the nature of the council’s role and relationship with customers, local authorities are seeking alternative mechanisms to meet customer needs and thereby better manage demand. Changing behaviours – of frontline practitioners, managers and customers – often features as a critical enabler of demand management. (2)

Bore reported to the panel that Deloitte’s has convened a series of workshops within the Council to identify which groups of Birmingham citizens are placing what demand on which local services.

‘The aim of these workshops was to identify potential changes to present and forecast demand that could be implemented by the Council to deliver the necessary savings that still need to be made by 2020 (c£250m) whilst continuing to best ensure that the citizens of Birmingham receive the priority services they need.’

Around 230 “demand management” opportunities have been identified through these workshops. These are currently being developed into “cases for change” that will be opened up for wider consideration with members, staff, stakeholders, partners and citizens.’ (3)

The costings of these ‘savings’ will then be fed into the Council’s Long term Financial Planning. Bore has made it clear that the options facing the council over the next five years included making decisions to discontinue some existing Council services and hand over the running of other services to ‘partners’. Bore said on Friday that the Council will set out its Long term Financial Plan up to 2020 in the autumn including how it will make the £250m of cuts.

This changing public ‘contract’ between the Council and their local citizens and their entitlement to services is being led by Deloitte’s, one of the big four Accountancy companies in the UK. The Public Accounts Committee accused Deloitte’s, together with KPMG, PWC, and Ernst and Young, of promoting tax avoidance in advising their multinational clients. Locally Deloitte’s are being rewarded with tax-payers’ money for advising on cuts to our local public services.

Deloitte’s role has also undermined the service review process previously led by Councillors which considered changes in how services were provided and made proposals for inclusion to the next year’s budget. In the Chamberlain Files Cllr Waseem Zaffar, chair of the main scrutiny committee commented that ‘we have a new system where it is predominantly officer engagement and members’ involvement at a later stage.’ (4)

A complementary aspect of the Council’s Improvement Plan is the communications strategy. ‘We want, as much as anyone, an honest, balanced and compelling narrative for Birmingham – emanating from ourselves and others.’ (5) Once again a private consultancy, Westbourne Communications, is being employed to ‘to reframe the way the city council comes across to the public.’

This managerial and technocratic approach employed by Bore to making these future massive cuts to the Council budget is profoundly undemocratic. Employing private companies to identify and then spin Council cuts is deeply cynical. The Labour leadership of this Council have maintained they provide a dented shield to protect the most vulnerable of the city. In reality they have no strategy for defending Council services and local citizens. Bore is being willingly led to impose further severe austerity measures upon the people of Birmingham under direct oversight from this Tory Government.

Decisions are to be made this November over the future shape of the Council for the next five years, including how the £250m cuts will be made. In the aftermath of the election of Jeremy Corbyn as leader of the Labour Party the challenge to the Labour Party in Birmingham is is it going to seize this important moment to oppose even deeper cuts or remain a prisoner of the Tory Government in imposing spending cuts which will end local government as we know it?

(1). Recommendation 5. Sir Bob Kerslake. The way forward: an independent review of the governance and organisational capabilities of Birmingham City Council.
https://www.gov.uk/government/news/kerslake-report-birmingham-council-must-radically-improve

(2). p5. Local Government Association. Managing customer demand – Understanding and changing behaviours to help meet the financial challenge

http://www.local.gov.uk/c/document_library/get_file?uuid=d51198ea-c73d-4c88-adea-b46e238f85eb&groupId=10180

(3). Letter of Sir Albert Bore to John Crabtree dated 4th September 2015.

(4). Accountants Deloitte to draw up £250m Birmingham council cuts package
http://www.thechamberlainfiles.com/accountants-deloitte-to-draw-up-250m-birmingham-council-cuts-package/

(5). Letter of Sir Albert Bore to John Crabtree dated 4th September 2015

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