Councillor Kate Booth, cabinet member for children’s wellbeing, said: “Our nurseries are running at a loss and this deficit will be £1.2 million next year. We’ve had the opportunity to sit down with the GMB and explore all the options and come to the same agreement together that it is best to transfer the nurseries to the private, voluntary and independent sector.” (Birmingham Mail 30 November).
The council is looking to transfer the nurseries into the private sector towards the end of Spring 2019. The nurseries employ 70 Birmingham city council staff. 18 are employed through schools and 32 come from the third sector. The plan is that all the staff will remain in their jobs as part of a ‘seamless transfer’, but of course that depends on whether there are private providers, whether they agree to take over the staff, and whether they are prepared to pay the same rates of pay.
Most of the staff are members of the GMB union. On 2 October 2018 the GMB website claimed ‘GMB Victory On Birmingham Nurseries… sees union’s alternative proposals forced onto the table for proper consideration’. ‘Gill Ogilvie, GMB Regional Organiser, said “Our fight to ensure these vital services are delivered in the public sector is not over yet, but this is a significant step forward.”
The GMB’s detailed alternative proposals could have saved almost all the nurseries. But they have been rejected by the Council, and the GMB has given up the fight and agreed that the Council should sell-off the nurseries. Gillian Ogilvie, the GMB Regional Organiser (and also Labour’s Parliamentary candidate in Walsall North), said: “We would still prefer the council to be funding these nurseries and for them to be run by council services but we recognise the council is in a difficult situation with the cuts imposed upon them. So it seems the best thing is for it to be put out to the private sector.”
But the Council’s analysis of the GMB’s proposals and its negotiations with the union have been kept secret. We ask: what ‘proper consideration’ took place? Why was there no public consultation about them with staff and parents? Why has the Council’s response not been published? And what figures was it based on?
How has the Council’s figure for the deficit more than tripled in 9 months?
In March this year, as part of the consultation process about the council’s day nurseries, the Council’s Birmingham BeHeard website published a spreadsheet table headed ‘Nurseries Financial Position March 2018’. (https://www.birminghambeheard.org.uk/people-1/council-run-day-nurseries/).
Under the heading ‘Financial support needed at end of year 19/20 to break even’ the total figure was £339,348. Now, 9 months later, the Council says the deficit for next year will be £1.2million! It has offered no explanation for how the forecast deficit has more than tripled in nine months. So how reliable are the figures that the Council’s rejection of the GMB’s alternative plan was based on?
How could private providers make a profit?
Private providers will only take over nurseries if they can make a profit (or at least break even, if any were non-profit providers). If the deficit next year is, as the Council says, £1.2million, that means the average deficit of each of the 14 nurseries is £86,000. How can the new owners possibly make a profit unless they cut staff hours and pay, employ less qualified staff, increase the cost of places, reduce opening hours, reduce the quality of provision, or some combination of these?
That is why it is vital that the business plans of would-be providers are made public to parents and staff before any contracts are signed. The buyers, and the Council, will want to keep the deals secret, claiming ‘commercial confidentiality’, but these are children’s and families’ lives at stake. That is the priority, not money-making – the business plans must be made public with full public consultation at each nursery.
How much will the Council have to pay to close nurseries that private providers don’t want?
At the City Council meeting on 6 November 2018 there was a written question about the plans to close the city’s day nurseries. The Council’s written answer said:
“By transferring the provision, the Council can reduce the impact of redundancy costs and enter into negotiations with the Department for Education regarding the clawback costs on the basis that the buildings will still be used to deliver services for children under 5 and their families. The estimated total cost of redundancy for the Council-employed staff is £624,581 which includes an amount for the Pension strain.
The total clawback liability on the eleven buildings is £3.21m. Five of these buildings are also being used as Children’s Centre Hubs by Birmingham Forward Steps which means that they are still being used and reduces the clawback liability from £3.21m to £2.29m.”
Redundancy costs would still be payable for any staff who aren’t offered comparable jobs with private providers. Clawback is money the Council has to pay for stopping using the buildings as day nurseries. So the Council would have to pay clawback for any buildings that are not taken over by private nursery providers.
Why is the Children’s Social Care Scrutiny Committee silent about the nurseries sell-off?
The Council has a Children’s Social Care Overview and Scrutiny Committee which is supposed to hold the Council to account on behalf of Birmingham’s citizens. As the Centre for Public Scrutiny says, ‘Scrutiny should reflect the voices and concerns of the people and communities as users of public service as well as electors.’ The Committee’s responsibilities include the Council’s day nurseries.
Since the May elections the Children’s Social Care Scrutiny Committee consists of 8 councillors. Five are Labour: Mohammed Aikhlaq (chair), Safia Akhtar, Diane Donaldson, Shabrana Hussain and Lucy Seymour-Smith. There are two Tories – Charlotte Hodivala and Alex Yip. Both represent wards in Sutton Coldfield, far from the socially-deprived areas that the nurseries serve. And there is one LibDem: Morriam Jan.
The Committee meets monthly. But it has never, as far as we can see from the agendas and minutes of meetings, had any discussion about the day nurseries and the Council’s plans to privatise them. Nor is it on the agenda of their meeting on 12 December. This is an extraordinary failure of responsibility. They urgently need to put it right by inviting members of the parents’ campaign to come to their meeting on Wednesday 16 January and have their say. The Committee has the power to ‘call-in’ any Council proposals, in other words call a halt to them and challenge them at a Scrutiny meeting. Surely now is the time to ‘call in’ the proposal to sell off or close the day nurseries and subject it to proper public examination, with the involvement of parents and staff.
Birmingham Council should join with other councils campaigning for more Government funding for day nurseries
The parents campaign opposes the proposal to privatise the Council Nurseries and demands that they are kept open as a Council-provided service. Saima Suleman, who used the Park Road nursery when her children, now aged eight and five, were younger, said on behalf of the group:
“Our question is that if these nurseries are in deficit, why would the private sector want to take them on? How would they make them profitable? And if a private investor is not making a profit, surely they will shut them down? These nurseries are in deprived wards and there are already private nurseries closing in these areas. This is about investing in our younger generations and showing that we care. Parents trust that the rules and regulations will be in place in council-run nurseries but they don’t know if this will be the case with privately run nurseries. The council-run nurseries are subsided so that they can afford them. Parents cannot afford to pay top up costs.
There are other areas affected by this, it’s going on in Tower Hamlets, Salford and Nottingham too. In Salford, campaigners have got the council to agree to fund their nurseries until 2020 to give the group a chance to lobby government and ask for funding. We’re hoping to do the same here.” (Birmingham Mail 30 November).
Saima is right. Birmingham City Council should have been publicly campaigning along with other councils demanding that the government increases its funding of day nurseries. But it’s not too late for the Council to postpone any decision about its nurseries till 2020 while it joins this national campaign.
And by then there may be a Labour government which has already stated it will increase funding for under-fives provision. How stupid will the Council be then to have sold the nurseries off to private providers to reap the benefits by pocketing the profits.
Raise these issues at the Budget consultation meeting on Wednesday 19 December 6-8pm in the Council House. Go to the Council website at https://www.birminghambeheard.org.uk/economy/bccbudgetconsultation2019/ to book a place.