Andy Street is Mayor of the West Midlands, and is a former Managing Director of John Lewis.
Last Summer, the eyes of the world were on us as we hosted the Birmingham 2022 Commonwealth Games. We delivered in spectacular style. Just over a year later, the city is once against the focus of attention – but now due to the deeply disturbing news that the City Council has issued a Section 114 Notice.
This financial mess will have substantial fallout. But the first and most important lesson to learn is that it was preventable. That’s why I’m determined to play my part in steadying our regional ship, protecting the Birmingham brand, and preserving the reputation of our nation’s great second city.
Effectively an impending bankruptcy notice, this move was prompted by the Council’s inability to meet its financial liabilities relating to massive Equal Pay claims, as well as reflecting an £87 million financial gap in its current budget. Their precarious position is also not helped by a disastrous Oracle IT system roll-out, which could cost Europe’s largest local authority £100 million to resolve.
This shocking news raises serious questions about the council’s leadership and the decisions they have taken over the last decade. Communities are concerned about the services they rely on. Thousands of staff are worried about their jobs. Citizens already struggling with cost-of-living pressures will be worried that they will foot the tax bill for Labour’s incompetence.
The city of Birmingham deserves so much better. I’m incredibly concerned that citizens – and the services they rely on – have been let down like this. Local people expected a plan of action – as did I – and instead all they got was a shrug of defeat.
The news has generated national debate on funding for councils. But it is simply not right for Birmingham to blame this situation on others. It is no secret that local authorities up and down the country have faced more constrained budgets over the past decade (even if the funding from the Government has been improving in recent years), and it has been challenging to keep services running to the standard that people expect.
However, the vast majority of councils of all political persuasions are managing to achieve this, with bankruptcy extremely rare. Pointedly, here in the West Midlands Combined Authority area, we have six other councils, all facing similar pressures of which none have suffered the same fate. It is the inescapable truth that this is a crisis of Birmingham City Council’s own making, and the failure of its leadership to competently grip an issue of which they have been aware for many years.
But it is not for me to conduct the inquisition – however severely there needs to be one. My job, as Mayor of the region, is to continue to put the city’s residents first, irrespective of politics. That means working tirelessly with ministers, Government officials, and of course the city council themselves to try and resolve this situation in a way that shields residents, their pockets, their services, and their futures.
Finally, it’s also my job as Mayor to ensure that this issue is not allowed to overshadow the phenomenal successes we have achieved here in the West Midlands in recent years. Since I became Mayor, this region has seen record investment and real economic revival.
Birmingham’s economy has grown by 36 per cent in the last ten years – a success story that helps explain last week’s Financial Times headline ‘Birmingham council goes bust while the city around it booms’. A world-class transport network is being built here, after decades of neglect and under-investment.
We’re leading the way on housebuilding and the regeneration of brownfield sites. Our outstanding universities are driving innovation. Huge global brands are choosing to make this region their home.
Specifically, we have the highest Foreign Direct Investment (FDI) volumes ever recorded for Birmingham – record-breaking figures that represent a huge 50 per cent growth in just 10 years. So far in 2023, Birmingham has attracted more FDI jobs than any city in the UK outside London.
Global giant Goldman Sachs employs 400 in the city and has provisioned its new Birmingham office to accommodate up to 1,000 people. And Birmingham recently won its bid to host the SportAccord Summit in April 2024 – bringing the world’s top sporting decision-makers to the city. Just last week, the Brindleyplace campus in the city centre sold for £125 million. Birmingham is still very much open for business.
These successes have been mirrored by an upsurge in civic pride in our heritage, our abilities, and our potential – most notably when the world tuned in to the Birmingham 2022 Commonwealth Games. The Section 114 notice issued by Birmingham City Council has put us in the headlines for all the wrong reasons when there are so many more positive things to celebrate. We cannot allow it to derail the remarkable progress we have made in recent years and are continuing to make.
Part of Birmingham’s role is to be the city at the centre of the West Midlands, as our mission to renew our region continues, and we work to rebrand and transform outside attitudes. It saddens me that this self-inflicted wound could make this more difficult.
My message is simple: just because the Council has put itself in this perilous position, it does not suddenly mean that the city of Birmingham is failing. The council is not Birmingham.
Birmingham is a youthful, diverse, creative, and innovative place that is home to more than a million people, which boasts a driven and connected business community, and a rising reputation on the world stage. Brum has been at the centre of our region’s renewal, and the city is firmly open for business.
As Mayor, it’s my job to get that message out, just as I do for Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton.