The Birmingham REP Theatre

Bailey takes Birmingham Council to task over city development priorities

By: David Bailey @dgbailey
Published: Monday, January 19, 2015 - 12:14 GMT Jump to Comments

A failure to engage across the whole city, including the outer areas, is the economic development failure of Birmingham city council over the last 30 years, argues David Bailey

The recent Kerslake report on Birmingham City Council is right. Birmingham's prioritising of city centre development over front line services and skills development hasn’t worked.

One of the areas where the Kerslake Report was spot on was in relation to the huge cost of the Library of Birmingham, which Kerslake identified as a major contribution to the Council’s spiraling debt problem.

The report says that the Council’s failure to secure external sponsorship or raise sufficient money from land sales led to the council borrowing most of the £188m building and set up costs, with the library also costing some £10m a year to run.

This latest city centre ‘vanity project’ has burdened the city with a financial noose that now sees community libraries being shut down and others at risk of closing. Some 100 staff are set to lose their jobs and opening hours at the Library of Birmingham are to set to be slashed from 73hrs a week to just 40.

In other words, public resources have been diverted from providing critical services such as social services into another city centre vanity project.

Sadly, the library is merely the latest example of Birmingham’s focus on city centre development and glamour projects undertaken at the expense of front line services and the needs of the wider population of Birmingham.

Indeed, the focus of successive leaders in Birmingham over several decades – going right back to the 1980s - has been to focus on the glamorisation of the city centre. 

This tendency to prioritise city centre projects over investment in human capital in Birmingham has been noted by several expert groups. The OECD, in its 2007 Territorial Review on Competitive Cities notes that when a:

“shift of policy planners’ interest from long term capacity building programmes to short-term gain is accompanied by actual diversion of public resources to short-term promotional goals, as was illustrated in the case of Birmingham… the detrimental effects on the city’s long-term competitiveness would not be negligible”.

On speculative property-led developments, the OECD asks if it is “a sound choice to take such a risk at the cost of severe financial constraints on long-term programmes to build up local economic capacities”.

Rather, it goes on to argue that “competitive local economies can only be achieved by nurturing fundamental strength over the long-term; attractive physical environments created by prestigious developments can contribute to it, but… a ‘one club’ approach cannot achieve this goal.

Kerslake’s comments on BCC effectively pouring cash into city centre projects while residents in poor out of town neighbourhoods are left without jobs or skills, is merely the latest manifestation of this.

As Barber and Hall noted in 2008 , the city council was designated by central government as a ‘Beacon Council’ in 2001, and so held up as an example of ‘best practice’ in the field of city centre regeneration.

Not everyone agreed. In the 1990s, academics such as Loftman and Nevin criticised the apparent lack of employment benefits for the city’s deprived populations, noting that, in the early 1990s, 42% of employment at the ICC and 71% at the NIA were in low paid, insecure cleaning, catering and security jobs (Loftman and Nevin, 1994).

Loftman and Nevin (1996) also argued that during the construction of the ICC and NIA (over 1986 to 1992), the city council spent £120 million less on housing than the average for all local authorities in England (Loftman and Nevin, 1996).

In addition, as noted in the 2007 OECD Territorial Review, Birmingham revenue spending on education in 1990/91 was £46m less than that recommended by government (that was half of the national underspend on education at the time).

As Barber and Hall (2008) highlighted, a key consequence of this underinvestment in front-line services was Birmingham’s “categorisation as a ‘weak’ council in the Audit Commission’s Comprehensive Performance Assessment, especially in respect of housing and children’s social services”.

As I note in a forthcoming volume (Bailey et al, 2015), the ‘re-imaging’ of cities has been a key theme of modern ‘place-marketing’ efforts by city leaders, set within a  wider context of competition between cities for investment. Whilst recognising the efforts – and benefits - of policy makers to improve their urban environments, we argue that this race for mobile investment is both superficial and risks repeating earlier mistakes.

As Bristow (2010) notes, this quest for ‘competitiveness’ brings with it the dangers that policy serves external actors and not local communities, fosters a zero-sum ‘arms race’ of competitive subsidies, fuels speculative development which fails to address underlying economic problems, and fosters a narrow focus on a location’s assets rather than development.

Bristow notes that the opportunity costs of public funds being used to prop up such projects is lost investment in areas such as housing and education.

That, in a nutshell, is the economic development policy failure of Birmingham city council over the last 30 years. As Kerslake himself notes, “regeneration must take place beyond the physical transformation of the city centre… the council needs to engage across the whole city, including the outer areas”.

It’s time for a change.

Professor David Bailey works at the Aston Business School

Key References:

Bailey, D, K Cowling and P Tomlinson (2015) The City: a Focus for Industrial Policy? In D. Bailey, K. Cowling and P. Tomlinson, (ed.s) New Perspectives on Industrial Policy for a Modern Britain. Oxford: OUP. Forthcoming, 2015.

Barber, Austin and Stephen Hall. 2008. Birmingham: Whose Urban Renaissance? Regeneration as a Response to Economic Restructuring, Policy Studies, 29(3); 281-292.

Bristow, G. (2010) Limits to Regional Competitiveness, in J. Tomaney, ed., The Future of Regional Policy. London: The Smith Institute / Regional Studies Association.

Kerslake, B (2014). The way forward. An independent review of the governance and organisational capabilities of Birmingham City Council. London: DCLG.

Le Grand, J, A Wood, I Trowler (2014) Report to the Secretary of State for Education and the Minister for Children and Families on ways forward for children’s social services in Birmingham. London: DfE.

Loftman, P and B Nevin (1994), “Prestige Project Development: Economic renaissance or economic myth? A case study of Birmingham”, Local Economy, 8(4); 307-325.

Loftman, P and B Nevin (1996), “Going for Growth: Prestige projects in three British cities”, Urban Studies, 33(6); 991-1019.

OECD (2007) Territorial Review of Competitive Cities: A New Entrepreneurial Paradigm in Spatial Development. Paris: OECD.

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of The Information Daily, its parent company or any associated businesses.

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