England & Wales, Global, Ireland Finance, Personal and organisational development

Birmingham blues: thoughts from an Irish onlooker


Photo by Luke Matthews on Unsplash

Only a couple of weeks ago, I wrote a commentary following the release of the LGIU’s Local Democracy Research Centre’s paper on financing local government in England.

In this think piece, I made the comment that local government in Ireland would traditionally have looked at the arrangements in England – and indeed other parts of the OECD – and perhaps wished for similar arrangements in Ireland. I even went on to suggest that perhaps such wishful thinking might be a bit of faraway hills being greener given the actual findings in the research report.

The title page of the Local Democracy Research Centre's report 'The limitations of local government finance in England: A system wide perspective'

What I did not expect at that time was that I would now be writing so soon after about how brown the fields of England have become for local government. No one in Ireland, myself included, would have expected to see Europe’s largest local authority declaring effective bankruptcy so soon following the above publication – not that the two are in any way related!

The research highlighted the ongoing degrading of the local government system in England – and perhaps by extension across the rest of the United Kingdom. We currently await more research from LGIU’s Local Democracy Research Centre into the financing of Scottish local government to see what extent the system there is being impacted as well (set to be released in a few months).

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No one from within the ‘safe-distance’ of Europe could have foreseen what has occurred to Birmingham and indeed to several more local authorities – with, it seems, even more to come. Never mind predicting that, in part, the fall from financial grace for Birmingham is due to the issue of equal pay. I find this even more extraordinary. It would have been a fair assumption surely for most people to think that such an issue was a part of the past and certainly not the present. It is hard to envision that the system in Ireland, and elsewhere in the OECD, would countenance unequal pay conditions.

Maybe another question that could be asked is whether the issue is partly due to the still-slow pace of female movement into management positions. This remains a bugbear for Ireland and the local government system in particular. Albeit, from what OECD figures indicate on Ireland there is limited evidence of pay gaps in Irish public service generally.

So, it seems the people of Birmingham will have to be hit with a series of negative blows from failings in the procurement of expensive IT systems to obligations for fair pay and conditions. In addition, with such a severe reduction in central government funding (in the order of a 50% reduction in support over recent governments), it looks unlikely that the city council and other councils across England will work their way through a peculiarly British form of public bankruptcy.

In the past, local authorities in Ireland have confronted issues around their financial arrangements and have had to work through challenges – not always of their own making – and have done so with the support of their national colleagues. It is therefore hard to conceive of a situation where local authorities in Ireland would be forced to declare their inability to deliver local services through bankruptcy. Even at the worst of times, during the IMF austerity of 2008-2015, local authorities maintained, if not improved their services and, critically, their financial stability.

The success noted there is, no doubt, that the current financial arrangements in Ireland have similarities with the English system. The move towards bespoke national funding, pressures around pensions and the challenge of sustainable local resourcing at a time of increasing expectations and an ageing population all point to a need to be vigilant regarding local financing.

Nonetheless, it is difficult to think that a government in Ireland, no matter the political colour, would allow a local authority to go under. Perhaps, as I suggested in my commentary a few weeks ago, faraway hills, at least for England from an Irish perspective, are now a deep shade of burnt brown with limited expectation of colours turning green soon.

Want more on this topic? Check out these:

Read Sean’s earlier think piece here:
Local government in Ireland: Not as badly off as I thought it was… and our wider set of resources LGIU Collection: Local government finance – international lessons

LGIU’s statement on Birmingham’s Section 114 notice

Local government finance: a comparative study


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