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Welcome to birmingham.gov.uk

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Devolution and reform of public services

Your council is changing fast. We have to work towards a different future. The Leader and Chief Executive of Birmingham City Council have been consulting with staff to gather views on how we may operate – the focus, functions and form of our future organisation.

Our core priorities of Fairness, Prosperity and Democracy remain the same. But we need a new relationship with residents, supporting local action and increased local governance. We want our residents to take action on the issues that most concern and interest them.

Devolution – the lowdown

Council House image showing 8% of funding from Council Tax, 25% from services, 67% from central government

England has a very centralised system of government, with most tax revenue going straight to central government. This means local authorities have little control over the public money raised, and the government decides how most of it is spent. Only eight per cent of our income comes from council tax, and less than a third of our spending is actually under our control.

In common with the other large cities of England we have been arguing for a long time that we need more control over our resources and more freedom to decide how they are spent. The cities should also be in control of many more things currently managed centrally, such as welfare to work programmes and skills training. We argue that locally accountable authorities will deliver better results, more in line with the needs of the local economy and local people.

The evidence shows that cities in other countries with greater freedom from central control tend to perform better economically. This is because they can make local decisions on infrastructure investment, skills, housing and development that reflect the needs of the local economy. But devolution of funding for public services – and the pooling of funding into what we call ‘whole place’ budgets – is also crucial if we are to maintain decent public services and quality of life in the future. Continuing with the current centralised system and cutting council budgets by up to 60 per cent will only lead to the closure of many council services and greater costs for other services such as health, education and police.

We have been making some progress with these arguments in recent years, for example the development of ‘city deals’ which have seen a proportion of money allocated to local economic priorities, the switching of some NHS resources to social care and the Troubled Families initiative. All the main parties are committed to a larger single pot of funding for economic functions and to greater devolution of decision making. Following the Scottish referendum debate there is now an opportunity to push these arguments forward and to get a commitment to much more radical action from all the political parties.

Triple devolution

In Birmingham we have developed our own set of proposals for change which we call ‘triple devolution’. This recognises that different functions are best carried out at different geographical levels and that the city council must also devolve power and resources to local areas within the city.

Triple devolution diagram


City region level: strong governance and partnership working with neighbouring councils. Supporting local economy and growth through strategic planning, investment in transport, skills, business support and support to inward investment and major developments. We are asking government to devolve significant funding to this level in a ‘single pot’ to support these functions.

City level: providing health and social care and education services. Greater local control of a joined up ‘Budget for Birmingham’ that will enable us to work closely with other agencies to provide better support to children, families and older people and improved health and wellbeing for the city as a whole. The city council retains a regulatory role, for example in land use planning, licensing and trading standards and strategic oversight of other local services.

Neighbourhood level: moving accountability for services and budgets closer to local communities and service users. Further developing new ways of delivering integrated local services that are driven by local communities themselves. We will be taking forward this third level of devolution through our Community Governance Review.

Two fundamental changes are needed to achieve triple devolution:

1. Prevention

Moving from a focus on acute services and ‘fixing problems’ to ‘prevention’ would mean cheaper public services. If we do not provide adequate care for older people at home, they will end up spending more time in acute hospital beds, perhaps after suffering an injury. This puts tremendous strain on NHS resources. Investing in better care at home would save a lot of money but also improve the quality of life of many older people. Neighbourhood caretakers could do small housing repairs before they become major problems. We could work with troubled families to prevent children turning to crime and help people find work rather than leaving them on benefits.

Moving towards prevention would improve people’s lives. But it can only be done if we get services working more closely together and pool their budgets so that more joined up decision making is possible. Savings in expensive areas must be recycled to the frontline preventative activities that make the savings possible.

2. Local priorities

Giving local areas of the country more freedom to design services according to local needs and priorities would mean we can focus on the outcomes we want to achieve, rather than just delivering standard services defined nationally. For example we have decided to rethink our sports and physical activity services, focusing on the outcome of improved health and wellbeing for those most in need. This means we may not continue to provide general leisure services (though private companies may do so) but we will provide health and wellbeing centres in certain areas of the city. We need the flexibility to make such changes in other services.

Major transformation programmes

Within this framework for change, we have identified and started to implement major transformations to services across the council that could lead to radical improvements in cost-effectiveness in coming years, including:

  • Developing capacity at city region level for economic development activities – pooling individual councils’ resources and jointly commissioning key activities.
  • Integrated working at city level with key partners, for example jointly funding and planning health and social care services around the needs of people rather than organisations.
  • Integrating and clustering activities at local level through place-based management of local services, ensuring that all local service providers are able to play their full role as part of local teams. This will also involve much greater recognition of the vital role of community organisations, social enterprises and active citizens in caring for local neighbourhoods and others in the community. It will include putting housing at the centre of how we manage local places, with much greater co-ordination between different housing providers and local services.

Back to the Brum Budget 15 page.