The All-Powerful Budget Review Working Party

The Budget Review Working Party (BRWP), formed in May 1989 and wound up in June 1996, consisted of all the committee chairs, plus the Chief Executive and City Treasurer, and had the purpose of scrutinising every budget item in every department (on a rolling programme) in order to identify possible savings. This chapter is long and has a lot of detail about the Council’s finances. For someone involved in local government finance, this level of detail may be of interest. For the layperson, it can be hard to follow, but does give a sense of how complicated the budgets are and how managing a council to keep things on track is a very complex business. The blow by blow level of detail comes from Kath being a member of the BRWG for 5 of the years covered, first in her year as Chair of Personnel Committee, then for four years in the role of Chair of Education Committee.
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Rationale and Modus Operandi
The Budget Review Working Party (BRWP) was formed shortly after the Labour Group AGM in May 1989 as a response to the budget crisis and the implementation of the Poll Tax (as mentioned in chapter 13). The meetings were not formal Council meetings, were not open to other councillors, and were privately minuted, but the decisions made were to be put into reports for the Policy and Resources Committee for formal agreement. The Working Party consisted of all the committee chairs[1], plus the Chief Executive and City Treasurer. This BRWP had the purpose of scrutinising every budget item in every department (on a rolling programme) in order to identify possible savings.

Traditionally, each committee’s budget was set each year based on the previous year’s budget, with inflation added, and cuts deducted, and any over-spends or under-spends at the end of the year being held at the centre as ‘balances’. As the out-turn from each year wasn’t finalised until long after the following year’s budget was set, there was no real feed-back loop to inform the budget setting process. The ‘best guess’ at what the year’s out-turn would be was called the ‘probable’ budget.

By January 1989, it had become clear that the figures being produced for the budget setting process for 1989/90 were incompatible with the reports being considered by the Strategy Sub-committee (see below) that were reporting on the implementation of previous cuts decisions. Given the size of the new cuts that would have to be implemented in order to keep the level of the Poll Tax as low as possible, a better process was needed. At the joint meeting of the Policy and Resources Committee and the Finance Committee, Graham Stringer made it clear that it would be necessary to “carry out a thorough re-examination of the figures to ensure that they had been prepared in accordance with the Council’s previously agreed policies and decisions”. The committees resolved:

“That the report[2] now submitted be not accepted as a reasonable basis on which decisions can be made in relation to this year’s probable or next year’s estimated expenditure and that a working party comprising the Chair and Deputy of the Finance Committee (or their nominees) together with the City Treasurer, the Chief Executive and the Director of Personnel (as appropriate) be appointed to meet with the Chairs and deputies of service committees (or their nominees) to examine in detail the individual committee estimates…”

The Chair of the Finance Committee (Mike Harrison) spent many hours on this task – conducting a detailed scrutiny of every line of each department’s base budget, in conjunction with the chair and chief officer of each committee, and in February 1989, reported gleefully that he had managed to find over £15 million of savings that he believed would have no impact on either jobs or services. Welcome as this was, it still left a huge amount to be found.

During the following weeks, around a further £5.3 million of possible cuts were put forward by chief officers, but amongst sensible proposals, such as centralising the ordering and storage of goods and the management of the vehicle fleet, there were measures that were rejected as they would hit the very lowest paid employees, such as removing anti-poverty measures (£1.3 million), reducing the amount of building cleaning (£0.5 million), not using GIRO (Post Office) for collection of Poll Tax (which would hit those residents without bank accounts) and increasing charges for school meals and meals on wheels – all desperate (and unacceptable) measures[3].

A moratorium had already been placed on all expenditure. Everything that was not absolutely essential had to be cleared by the Chief Executive (Gordon Hainsworth) and the Leader of the Council before expenditure could take place. Also, immediate action was to be taken in those areas where the Council was failing to maximise resources (eg letting of commercial premises and collection of rents).

By July 1989 the BRWP had met twice and agreed around £11 million in savings. It became the mechanism for not only scrutinising every budget item in every department, but for developing new policy, co-ordinating action throughout the Council and creating a strong leadership team of senior councillors led by Graham Stringer. There is no doubt that it also became the mechanism for exercising central control over service departments that had not existed before and for driving through improvements to core council services.

In theory, it had been possible previously for central political control to be exercised over service committees because all decisions had to be ratified by the full Council and all the committee minutes were considered by the full Labour Group prior to each Council meeting. However, in practice it wasn’t possible for the Council leadership to keep tabs on everything and it would often be too late to radically change direction by the time the committee minutes came to Council. In November 1984, Graham had established a new sub-committee of the Policy and Resources Committee called the Strategy Sub-committee, which consisted mostly of committee chairs and was a powerful mechanism for controlling the major corporate decisions of the Council, but it rarely dealt with issues from service committees.

Within the BRWP forum, each service committee chair was answerable to the leadership (and the other chairs) for their committee decisions on budget, service delivery, and everything else and had to be very competent and knowledgeable. When scrutinising the budget and/or delivery of a service that came under a particular chair’s remit, Graham Stringer had a way of enlisting the support of the other chairs which made it almost impossible to defend a position (unless the grounds were very strong), even though each Chair would be in the same isolated position when their turn came.

Graham made a distinction between political control and management control and criticised chairs for trying to do the chief officer’s management job or being too defensive of the decisions taken by officers. Richard Leese too was critical of chairs for being too involved in the detail (micro-managing), although he himself knew every detail of the service areas for which he had responsibility (Education, Children’s Services, and then later, Finance).

The BRWP was a very effective forum because of the calibre of the committee chairs and the strength of personality, management skills and intelligence of Graham Stringer. But it was also effective because it was a closed forum with strict control over access to its papers and minutes, so that people were free to say the unthinkable in a ‘safe’ forum without criticism or fear of leaks to the press, enabling issues to be thoroughly debated and consensus reached, with only the final decision being recorded.

Reviewing Services for Savings
By the autumn of 1989, although there was still some uncertainty from the government about the level of Revenue Grant to be expected, it was fairly clear that the introduction of the Poll Tax was going to be a financial disaster for the Council (as covered in chapter 13). At that point, the predicted expenditure for the 1990/91 financial year was £430 million, but to get down to an acceptable level of Poll Tax of between £400 and £450 the overall budget would need to be reduced to around £350 million.

In October 1989 the chief officers were instructed to review every Council activity, describing in detail what every group or team of people did, and what the associated costs and income streams were. A number of key objectives were set as the basis for all the reviews. These were:

  1. Delivering quality services;
  2. Combating poverty;
  3. Changing the culture of the Council;
  4. Changing the composition of the workforce [see chapter 15].

All chief officers (in conjunction with their committee chairs) scrutinised and prioritised their budgets. The Chief Executive (Gordon Hainsworth) and the City Treasurer (Jim Brooks – who had only been in post a few months by then) set up a team of chief officers to work together on reviewing all this and also working on ‘across-the-board’ issues.

They began the process of scrutinising departmental use of overtime and re-grading payments, the effects of the recruitment freeze, and even the use of paper and photocopying and the operation of the Council mail room. But there were also major pieces of work done over the subsequent twelve months on ‘value for money’ studies, the possible centralisation of all Council purchasing, and ways of maximising income by making the best use of land, buildings and other resources. They reviewed the total costs of operating the Council’s buildings, such as the Free Trade Hall, the Abattoir, the Moss Side District Centre, the Withington Town Hall, the Central Laundry, and the new Smithfield Market.

One of the more controversial measures that was introduced was that of the so-called ‘sickness monitoring’ procedure. In any organisation, there is a budget cost due to staff absence, but the Council’s percentage of time lost was thought to be very high. Procedures were established for departmental managers to monitor and report on levels of absence and for them to interview absentees on their return to work, with a view to reducing absenteeism. Councillors believed that these sort of processes were sensible and should have been routine, but the trade unions (understandably) were very concerned that some managers would use the process to get tough with genuinely sick workers and that a culture of bullying would ensue. Despite these concerns, the monitoring went ahead and reports went regularly to the BRWP meetings showing the percentage of time lost through absence, broken down by department and section.

External Evaluation
In order to get an external opinion of the Council’s financial and management systems, one of the city’s major financial consultancy firms was commissioned to do a full review. Their report (dated December 1989) highlighted the need to change the management style within the Council, which was described as ‘crisis management’. The report highlighted four key weaknesses:

  1. Lack of direction caused by too many priorities, unclear objectives, conflicting policies, unclear roles and responsibilities and unpredictability of the decision-making process.
  2. Lack of communication caused by inadequate corporate systems, staff unaware of key issues, unclear advice to politicians, and limited access to IT.
  3. Lack of information caused by available data being irrelevant, untimely, not user-related and difficult to access.
  4. Lack of integrated planning caused by inadequate resource management and excessive legislative change. [Some recognition at least that everything wasn’t the fault of the councillors or chief officers!]
2-Year, 3-Budget Strategy
The consultants recommended six actions, but advised the use of external resources (ie themselves) to assist with implementation as they believed (not surprisingly) that the required resources were not available ‘in-house’.

So, in January 1990 a number of ‘away days’[4] were planned for the chairs of committees and the chief officers to go through the service and budget profiles, rigorously examining everything that the Council did, and addressing the issues raised by the consultants.

The consultants had arrived to facilitate the day, but during their introductory presentation, it seemed they hadn’t grasped the nature of the exercise required and they underestimated the abilities of the leading councillors. By our body language and eye signals to Graham Stringer, we made it clear that the session was a waste of time, so at the first break, Graham asked the consultants and the chief officers to leave us for a private discussion. He posed the question – “What do you think we should do?” There was a consensus that the consultants should be sent packing and that Nick Harris and I (with our training and teaching experience) should take over the facilitating, which we did.

The subsequent sessions were exhaustive (and exhausting), with councillors and chief officers working together, given equal status (not a usual occurrence) and went on till late into the evening and over dinner. Questions were asked about everything – Why is this service provided? How is it provided? Do the citizens of Manchester need this service? Do we do it well or could others do it better? Is it a statutory service? Can the Council opt out, and if so, will it cost more if provided by someone else? Nick and I filled pages and pages of flip chart sheets (and the subsequent writing up was a major exercise), and at the end of this process, a series of ‘ball-park’[5] cuts figures were allocated to each department.

It was recognised that it would be impossible to achieve the level of cuts required in just one year, and so the strategy being developed was for the reductions to take place over two years, covering the budgets for 1990/91, 1991/92 and 1992/93 all at the same time. This was referred to as the ‘2-year, 3-budget strategy’.

A set of five over-riding objectives were agreed that would inform the whole budget and departmental re-structuring process. These were:

  1. To preserve the local democratic structure;
  2. To deliver high quality services to the people of Manchester;
  3. To combat disadvantage;
  4. To re-distribute wealth and power;
  5. To achieve financial stability.

In addition to this, a number of strictures were imposed on departments – such as in Education absolute protection was to be given to under-fives and primary education, with the brunt of the cuts to be borne by the post-16 sector[6]. In Social Services, priority was to be given to high quality Care in the Community. In Leisure Services, the Free Trade Hall and Withington Town Hall had to raise more income, some facilities were to be closed (such as public conveniences, branch art galleries and the central laundry), and others – such as Allotments, Laundries, Crematoria and Cemeteries – had to become self-funding by increasing their charges (see chapter 23).

Loans and Capital Receipts
After the away days in January, the BRWP met fortnightly, and sometimes more often over the following four months to May 1990, to monitor and refine the budget strategy, although not all of the committee chairs attended regularly because of work commitments. Only Graham Stringer, Richard Leese, Nick Harris, David Black and I attended almost all of the meetings.

Gordon Hainsworth tentatively guided the process, treading carefully all the time so as not to upset his political masters, but frustrated at times by the frequent lack of clarity about where things were going. Each chief officer and committee chair was subject to scrutiny by the BRWP of every aspect of their service profile and budget. I described this process to a friend at the time as being as painful as ‘pulling teeth’ – dragging a 19th century bureaucracy into the 20th century. We were trying to build a lean, but robust structure to withstand the attacks from central government whilst maintaining essential services needed by an underprivileged local electorate. The Council’s financial management systems were inadequate for the task and the information systems lacked any sophistication.

A complicating factor in all the re-structuring of departments and changes in service delivery was the government-imposed CCT (see chapter 14) which necessitated splitting some departments into ‘contractors’ and ‘clients’ with separate managers.

Despite all the assumptions about what could be saved (see below), there was still a budget ‘gap’ of around £30 million in the 1990/91 budget. The final measure taken to ‘bridge’ that gap was another ‘lease and leaseback’ (creative accountancy) scheme. A loan was negotiated, with the Council’s assets as security, whereby the Council borrowed £200 million, repaid £170 million immediately and repaid the remaining £30 million over a number of years[7]. The accrued interest on this borrowing was £50 million so there would be £80 million to pay back eventually, but the £30 million was available that year to bridge the budget gap and avoid rate-capping. Complicated negotiations with bankers ensued to re-finance all the Council’s loans over 20 years[8]. The debt from previous borrowings of £127M was converted to a long-term bond issue with fixed interest over 20 years and repayments of £6 million a year.

In February 1990, the Poll Tax was finally set at £425 per head. The total Council expenditure for 1990/91 to meet that figure was set at £354 million. After the loan of £30 million and projected income of around £4 million, the level of cuts to be achieved by 1992 was £42 million.

A very sensitive issue that had to be resolved was the Labour Party’s policy of opposition to the Tory government’s ‘Right to Buy’ legislation (because of the Council’s inability to build enough new houses to replace the loss of rented accommodation). The Council obviously couldn’t refuse to implement this legislation, but since its introduction, applications had been processed very slowly. Since there was a need to increase the amount of income generated from ‘capital receipts’ (sale of Council property) in order to minimise the expenditure cuts, there had to be a change of direction and new, speeded-up processes were introduced, with the number of sales each week being centrally monitored by the BRWP.

Reducing Staff and Changing Wages System
At the meeting on 2nd March 1990, a commitment was made to reducing the number of Council employees without any compulsory redundancies. One of the trade unions wanted us to declare compulsory redundancies and initially wouldn’t accept efforts at redeployment and Voluntary Early Retirement (VER). Each chair was instructed to consult their departmental trade unions on this and the majority wanted to co-operate with whatever voluntary measures were possible and avoid compulsory redundancies. A long discussion ensued on the role of the central departments (ie Chief Executive’s, Personnel and Treasurer’s) and their relationship with the service departments. Graham Stringer viewed the latter as ‘fiefdoms’ that had to be brought into line, but he had very little knowledge of the complexity of services provided in departments such as Education and Social Services.

One measure that was predicted to make sizeable savings was moving all employees on to so-called ‘cashless’ pay. This would mean using the automated banking system for paying salaries directly into employees’ bank account instead of having to use armoured guards and vans and copious amounts of administration for weekly wage payments in cash[9]. However large numbers of lower paid employees had no bank accounts and to expect them to suddenly start managing their money monthly, when they had been used to weekly cash payments, would involve a massive cultural change for them. These problems were anticipated by the councillors, but seemed to be a revelation to some of the chief officers. Staff were dispatched to hold discussions with Post Office officials in relation Giro payments and to set up procedures for advising and supporting employees in setting up bank accounts, but it was recognised that it would take some time to implement this decision.

Another budget saving device that was introduced was the so-called ‘vacancy factor’. Since there was around a 10% turnover of staff and it always took a certain amount of time to recruit someone to a vacant post (advertising, short-listing, interviewing etc) and then a further amount of time whilst the appointee served notice at their previous job before starting work, it was estimated that around 2% of all staffing budgets would be unspent, and so this could be built in as a saving. So 2% was cut from all staffing budgets as a ‘vacancy factor saving’. At the time, I thought that this was Richard Leese’s idea, but apparently it was standard practice in other local authorities and was probably suggested by the City Treasurer.

Restructuring Committees and Departments
At the BRWP meeting on 19th March 1990, Gordon Hainsworth was still unclear about the direction councillors wanted to go. With hindsight, this may have been because of the conflicting messages from different members of the BRWP (Graham Stringer’s priorities were not always shared by Nick Harris, David Black, Richard Leese or myself). Gordon had been in the post of Chief Executive for 18 months and had a mammoth task to do, with no deputies (see later). He believed the departments were close to breakdown and argued for us to do a limited number of things well, rather than trying to do a lot of things inadequately. In a report to the Trade Union Forum, Graham summarised the weaknesses in the departmental and committee structures of the Council and the need for change:

“1. Existing structures are inadequate on a number of counts:

1.1  [lacking] the flexibility to change as needs, circumstances and policies change;

1.2  poor financial and management information systems;

1.3  political control inter-twined with the bureaucracy, leading to political control being exercised in an ad hoc and piecemeal, rather than systematic, way;

1.4  substantial overlap and duplication in some policy/service areas and a lack of co-ordination across departments in others;

1.5  large and cumbersome senior management team, excessive layers of management and inflexible workforce;

1.6  poor management of physical resources, especially land and property.

2. There is a need for change, and a strong case for doing as much as possible to change both the organisation and the culture [of the Council] by the end of the financial year, to give:

2.1  a small, compact senior management team, leading policy implementation;

2.2  devolved service delivery and management based on clearly-defined service levels and cost-centre management;

2.3  oversight and co-ordination at the centre – of human resources, finance, land and property, and information – to deliver long-term strategic plans;

2.4  political control exercised through clearly formulated policy objectives, setting of targets, monitoring and reporting back.”

Whilst the Chief Executive had suggested a ‘big bang’ approach to making the necessary changes, the BRWP felt that the Council should adopt a more gradualist approach, in order to avoid damage to morale at all levels of the workforce.

There was a consensus that there were too many departments in the Council (each with an expensive senior management team) and so ways of merging or closing departments were sought. Although intending to reduce the number of departments overall, it was decided in April 1990 that in order to manage the Council’s ‘estate’ properly, a new Land and Property Department would be created by dis-establishing both the Markets Department and the Economic Develop-ment division of the Chief Executive’s Department. It is interesting that this was going back to the way things had been prior to 1984 when there had been a separate Land and Property Department with Economic Development as a section of it.

As well as being responsible for all of the Council’s land and buildings, this new department, under a new Chief Officer[10] was to be responsible for the Markets and the large multi-service centres, such as the Abraham Moss Centre, the Wythenshawe Civic Centre and the Moss Side Centre. In addition to containing shops, these centres incorporated sports facilities, theatres and, in the case of Abraham Moss, a large secondary school. Managing all of these different kinds of services within one management structure proved to be an enormous headache for the officers concerned.

The Recreation Department was one of those that it was deemed necessary to split up – partly because the senior management team were felt to be ineffective (see chapter 23), but partly because of the impending client/contractor split necessitated by CCT (chapter 14). But it turned out not to be feasible to break it up completely, so a partial re-organisation was carried out[11] and officers from the Chief Executive’s Department who were known to be competent, were seconded over to co-ordinate the management of the Free Trade Hall, the Forum Theatre and Withington Town Hall (see chapter 23).

As well as the massive re-organisation of the Council’s departmental structures, imminent government changes in the financial allowances scheme for councillors[12] meant that they wouldn’t be able to afford to spend as much time in overseeing/ scrutinising what was happening, so there was a need for changes to be made in the political culture as well as in reducing the number of committee meetings.

David Black, Nick Harris and I had been working for some time on proposals for rationalising the number of committees as we felt far too much time was wasted in meetings and the system was too bureaucratic. When we had gone to Graham Stringer with our early proposals, he had sent us away to do more research and come back with a well-argued report. So we had been to visit to other councils to see how they were organised, talked to researchers at university local government departments, and put forward a report with a number of possible options for committee mergers. However, there was strong opposition to a radical reduction in the number of committees by those councillors with a particular interest (ie actual or potential future chairs) and in the event very few changes were made[13], although more of our recommendations came to fruition as a result of the later CCT changes (see chapter 14).

The committee cycle was changed from meetings being held every five to eight weeks, which, as well as saving on councillor time, also saved in administration and committee services staffing. All the sub-committees of departmental committees and all working parties were abolished and any committee that wanted to re-establish or set up a new sub-committee or working party had to submit a proposal to the Strategy Sub-committee.

And the final element of the ‘package’ was that all committees were instructed to consider increasing the delegation of decisions to their chief officer, rather than involving the politicians in everything. This marked a radical change from the previous left-wing ‘hands-on’ approach to the administration and was the opposite of the approach taken by the BRWP.

As well as considering radical changes to the service departments, attention was focussed on the role of the central departments – Chief Executive’s, Personnel and Legal departments. BRWP agreed in principle that the legal and administrative sections of the Chief Executive’s Department should be merged and there should be a complete re-organisation of the ‘mini-departments’ dealing with Corporate Affairs to provide “an effective, internal, cutting edge mechanism for effecting change”.

I had proposed making the Personnel Department part of the Chief Executive’s Department, but this wasn’t agreed. Although it seemed to me to be a logical move, at the back of my mind I also saw it as an opportunity to disestablish the Director’s post and thereby get rid of Roger Matthews, who I believed to be particularly unhelpful in the process we were going through. However, I knew that this was not a valid motive and didn’t feel strongly enough to push for it. What was agreed though was that the Personnel Sub-committee would become a ‘Personnel Policy’ Sub-committee and focus on council-wide policies, with the detailed staffing structures work being delegated to officers. The incorporation of Personnel into the Chief Executive’s Department was eventually carried out, but not until April 1993 (see below).

Balancing the Nitty Gritty with Grand Plans
Following the Labour Group AGM in May 1990, the membership of BRWP changed[14] and I ceased to be a member as I was no longer a committee chair (see chapter 22).

During the spring and summer months of 1990, the BRWP had continued to meet every two weeks and scrutinise problematic sections of service departments as the allocated cuts were not being achieved as quickly as anticipated – particularly in the Recreation department. The Chief Executive was tasked with reviewing the swimming baths in the city (see chapter 23) with a view to closing some of them, however, the campaign for the Olympic Games (see chapter 25) meant that swimming facilities would be needed and so the reviews had to encompass the potential in the city’s baths to be developed to Olympic standards.

Reviews were also commissioned into the city’s public laundries and the subsequent closure proposals proved to be very controversial within the Labour Party (particularly the lack of consultation) and with local residents (see chapter 23).

In June 1990, a special full-day Labour Group meeting was held away from the Town Hall (at the GMB College in Whalley Range) to discuss the political priorities for the forthcoming year. Whilst the five priorities identified six months earlier were to be taken as read, the Labour Group officers felt that more specific emphasis need to be placed on improving the Housing and Repairs Service (and reducing voids), and improving refuse collection and street cleaning. But also, that plans should be developed for what we wanted an incoming Labour government to do, which would entail developing a more coherent view of how the city (not just the municipal service) should develop in the future, with a focus on Manchester’s position in Europe and internationally.

I found it interesting to note the contrast between wanting us to focus on just a few ‘nitty-gritty’ service issues, but also the very grandiose idea of our position in the world. Developing a European and International focus for the city was a new concept, and from then on, a very important priority for the Council (led very much by Graham Stringer).

Graham reported to the City Party in July 1990 that the aim was still to achieve cuts to the revenue budget of £41.612 million by 1992, with three-quarters of that to be made in the current financial year, but that the Council was still overspending and that if the budget wasn’t brought under control, there would be redundancies. His reported stated that:

“The Labour Group is determined not to panic. Decisions taken too quickly are rarely the right ones. However, there is a determination to make sure that budget targets are reached.”

He explained that wage settlements and inflation were higher than budgeted for and that although VER and redeployment schemes were in place, the workforce was not reducing as quickly as anticipated, and that approximately 3,000 jobs would be lost.

“Within the Labour Group there is deep concern about the quality of some of the services the Council delivers and the level of political control the Council has over its services… ‘Service Plans’ are the start of improving some of the services and their accountability.”

He also reported on the problems with the capital programme – ie that £83 million was needed just to complete current commitments, but that only £76 million was currently available. It was hoped that the £7 million gap could be met from capital receipts, and if there were any additional capital receipts, they would be used to pay off the most expensive debt, and after that, to go towards routine building maintenance. In other words, no new capital projects were to be undertaken.

The City Party agreed the following priorities for underpinning the budget reduction process:

  1. Generate new, or more, income rather than cut a service;
  2. Improve service efficiency, including rationalisation of under-utilised buildings;
  3. Cut the services likely to be provided by others (eg non-statutory sector);
  4. Increase charges for services;
  5. Avoid redundancies.

To resolve the problem of the Chief Executive having no proper support, it had been decided to establish a Deputy Chief Executive position. Gordon Hainsworth recommended Howard Bernstein for this position and his appointment was made official at the Policy and Resources Committee in June 1990 (without a formal interview process, which caused some disquiet in the Labour Group). The Chief Executive’s Department was to be re-structured to recognise the five roles[15] carried out, with a reduced staffing budget of £8.2 million. But the structure that Hainsworth proposed at the Policy and Resources Committee in August 1990 exceeded the budget by £108,000 and councillors believed there were nine principal officer posts too many.

Hainsworth put forward a revised structure to the P&R Committee on 3rd September 1990, but Councillors were still not happy with it. They agreed that the Deputy Chief Executive should head up the Executive Division and that the Regeneration Section should include an Equalities Team (incorporating Race and Equal Opportunities) headed by a post at the grade of PO5, but then adjourned the meeting for a week in order to scrutinise every principal and senior officer post in the structure. It was a very unusual step for the P&R Committee to undertake this level of detailed scrutiny (which would normally have been done by the Personnel Committee). I suspect that, behind the scenes, Graham Stringer was having some very tough words with Hainsworth and Bernstein.

Looking Closely at Cuts and Spending
In November 1990, three meetings of the BRWP were devoted to the Recreation Department’s budget, which was still not under control. Only £2.6 million of the £4.3 million cuts allocated had been achieved, leaving a £1.7 million projected overspend for the 1990/91 year. In addition to needing to meet this shortfall, there was an additional cut of £3.8 million to be achieved for the forthcoming 1991/92 year. At the P&R Committee (on receiving the report from the BRWP), the acting Director (Roger Cornwall) was told in no uncertain terms (and this was minuted) to ensure tight management of his budget and it was recommended that 122 posts be cut from the structure, income increased and pro-rata cuts made to grant-aided voluntary sector organisations. In the Council minutes, seven of the major recommendations were printed in bold type to stress the seriousness of the situation. The BRWP was in fact acting as the employing committee for the Recreation Department, much to the chagrin of the councillors on the Leisure Services Committee, and without any real understanding of the impossible task[16] that the department had been set (see chapter 23).

The following month the focus turned to the Environmental Health & Consumer Protection Department for its non-achievement of savings – only having cut £256,000 against ballpark of £417,000, but holding high level of vacancies to compensate for this which was making the operation of the department problematic. The department was instructed to change its staffing structure.

After more than 18 months of unremitting work to reduce expenditure, re-structure departments and win contracts for competitively tendered services, the second year budget for the ‘2-year 3-budget strategy’ was threatened by further bad news from the government in January 1991. Although Manchester’s SSA for 1991/92 was going to be £52.931 million (14.95% above the level of 1990/91), it was £1.6 million less than the provisional settlement that had been indicated in the autumn[17]. It was clear that (in anticipation of a general election in 1992) money had been shifted towards the, largely Tory-controlled, shire counties and the areas of the country where Tory MPs held seats with small majorities, and away from metropolitan districts and inner-city areas, which were largely Labour-controlled areas.

Also, government changes to the administration of housing benefit (transferring the responsibility to local authorities) and the reduction in subsidy from 97% to 95% was set to have a significant impact in Manchester (calculated as equivalent to £12 per Poll Tax payer) – giving the lie to the government claim that transferring this function to local authorities would be at nil cost.

It was agreed that the BRWP would need to do further scrutiny of draft estimates to ensure that no unauthorised expenditure was included, and report direct to Council in January with recommended action. Some committees had apparently not yet given information to the City Treasurer and these were ‘named and shamed’ in the minutes as Leisure Services (Recreation) and Social Services.

At the January meetings of the BRWP, the members expressed their frustration that “the quality and accuracy of the information is little better than 12 months ago” and it was agreed that Richard Leese (as Chair of the Finance Committee) would meet with each committee chair and chief officer to scrutinise individual committee budgets.

Further measures that were to be implemented (with a progress report in March) in order to achieve budget reductions were – electronic mail replacing internal mail; 15% reduction in photocopying; departmental budgets to be re-charged for the use of Council rooms (to maximise the possibility of external income) and Room 301 (previously part of the Lord Mayor’s apartments) to be refurbished in order to use it for meetings; all costs for printing, stationery, publicity, promotions and advertising to be reduced. Also, the possibility of saving money by centralising all the stationery and office equipment stores was to be examined – at the time, separate stationery stores were held in the Chief Executive’s, Housing, Education, Social Services and City Treasurer’s departments. A full review of the capital programme and the capital/revenue strategy was to be undertaken and in the meantime, no further capital projects were to be committed.

Increased Expenditure
To compound the painful process of cutting existing expenditure, there were unavoidable increases in future expenditure anticipated. Wage inflation was running at 8.2% and prices inflation at 7%. To add to that, additional staffing was urgently needed within the City Treasurer’s Department in order to ‘close down’ the accounts for 1988/89 and 1989/90 and to develop systems for more effective and rigorous budget monitoring, which had proved thus far to be inadequate.

Despite all these additional budget pressures, the overall expenditure for 1991/2 at that point was predicted to be £416 million, which was only 2.2% above the predicted level of SSA (which was also the capping limit) of £406.931 million (£62 million more than last year). So, this second budget of the ‘2-year, 3-budget ‘ strategy was set at the capping limit – recognising that £10 million of cuts still needed to be achieved – enabling a Poll Tax of £431.88 per head to be set.

Chief officers were paid much less in Manchester than in other local authorities. We needed to retain good officers, but also when appointing new ones, avoid making costly mistakes and retain the ability to get rid of them if necessary. Graham Stringer’s solution was to offer ‘fixed-term’ contracts to new appointees. But then existing chief officers had to be considered too and so new contracts were negotiated with them. In effect, they were negotiating away the security of their previously permanent positions for an increase in salary. In February 1991, Roy Jobson (Chief Education Officer) agreed a seven year contract; in April 1991, Sinclair McLeod (City Engineer) agreed a five year contract; in December 1991 David Owen (Director of Libraries and Theatres) and Richard Gray (Director of Art Galleries) agreed five year fixed term contracts, but these were the last two.

Away Day and Press Coverage
At the BRWP meeting on 19th April 1991, each chair had been asked to give their perceptions of how things had gone over the previous 15 months and as a result of that it was decided to convene another ‘away’ weekend on 3rd/4th June in Blackpool in order to review priorities and discuss in more depth the issues raised. In May, I was back as a member of the BRWP[18], having been elected as Chair of the Education Committee (see chapter 22), but was unable to attend this weekend.

In the first session, each Chair was asked what they felt needed to be discussed (and resolved) over the weekend for it to be considered a success. Some of the contributions were:

“Look for a larger vision – an overview… don’t concentrate on small things only; How can we use the City Council as a generator of confidence for residents… use it better as a political unit to provide improved services and improved employment etc; Examine where we’ve failed over the last 15 months or so and use this [to find] a way forward… examine why certain decisions weren’t implemented; need to be much clearer about processes for carrying out whatever decisions are made. Need to ensure that the decisions are translated into practice right across the council’s activities; Look at relationship with trade unions and why there have been difficulties and disputes… look at management and training; Need to discuss ‘bread and butter’ at the same time as discussing ‘cream’… need to establish some straightforward objectives that can be achieved over next 12 to 18 months.”

It was concluded that the focus for the next sessions should be:

“What obstacles have prevented us achieving the objectives [we] set and what would we like to change? What is our vision for the next 12 – 60 months?”

The plan was to set around ten objectives and ways to make sure they were achieved and to work on the 3rd budget of the ‘2-year, 3-budget strategy’. At that point, cuts of around £30 million had been achieved out of the total of £42 million cuts that were to be achieved over two years.

Out of these subsequent sessions came 22 things identified as obstacles to achieving the objectives set, with 25 proposals for overcoming these. In addition to the proposals directly connected to service delivery, such as “develop effective financial and management systems” and “develop service plans” (see chapter 19), there was an emphasis on proposals for enhancing the City, such as:

“Revamp Piccadilly Gardens; Create a sense of City Pride and community spirit; Develop an Arts policy for the City; Make the City ‘children friendly’; Ensure the City is featured in more films and TV programmes; Develop the Great Northern Warehouse [a big eyesore at the time – see chapter 24]; Win the Olympics; Develop the City’s two big parks for greater usage and income generation; Don’t lose Manchester’s culture of dissent and non-conformity”.

Graham summed up the outcome of the weekend’s deliberations as:

[We are] much clearer about the importance of service plans as agent of control and accountability for departments; Consensus on view of City and its relationship to national government, its citizens and the private sector; Need to make sure others are clear about the direction we are taking; Need to be more pro-active with external agencies and partners in order to realise our vision for the city.”

The Manchester Evening News found out about this weekend in Blackpool and gave it the front-page treatment with lurid headlines – treating it as a ‘jolly’ at rate-payers expense. But these serious issues had to be discussed, away from the pressures of day-to-day crises in the Town Hall. To counteract possible criticism from the Party, Graham issued the following statement:

[We will] use all the powers and resources available to the council to promote the best possible quality of life for residents of Manchester City by:

  • Seeking to secure the economic health and prominence of the City by consolidating existing strengths and continuing development as the regional centre of the north.
  • Ensuring that the economic, cultural and social benefits of the City’s economic growth and expansion are available to all residents of the City with programmes of action to overcome disadvantage, discrimination and oppression.
  • Providing, within available budgets, high quality, efficient and effective services in ways which encourage the greatest possible accountability to residents.
  • Acting, as the directly elected local government of the City, to represent the best interests of the City in relation to national government policies, the activities of other agencies and national and international events.
  • Undertaking all activities in ways which recognise and seek to combat disadvantage, discrimination and oppression and promote equality of opportunity for all residents.”

So, despite the continuing pressures of budget cuts and departmental re-organisations and staff reductions, a positive and dynamic agenda was being set for the Council’s role in the city and in the country. The MEN reported in July 1991 that Howard Bernstein had applied for the post of Chief Executive of Glasgow Council (£64,000 salary), but had withdrawn from the shortlist because he was “committed to Manchester”, despite his salary being much less (£44,000 at the time). Howard’s role in achieving the ambitious aims set by the Council for Manchester should not be underestimated (see later).

On 25th July 1991, the Council leadership was at last given the opportunity by the MEN to make its case for the decisions being made. Although the headline was ‘Cutting deep’ and a stark list of closures[19] was included, the half-page article presented a balanced view with the by-line – “It is difficult to shut a library, but if it’s a choice between that or reducing help for vulnerable elderly people then there isn’t really a choice”.

Some of the positive decisions were included, such as not introducing charges for home helps and providing more support for elderly people staying in their own homes (see chapter 21) and taking over the funding of Victim Support groups which had lost their grants from GM County Council. Brian Harrison and Dave Lunts were given the opportunity to put a positive spin on changes within Social Services and Housing, but the article also quoted the Conservatives continually re-iterated point about the cost of the ‘ghost squad’ (the staff awaiting re-deployment after losing their jobs through departmental re-structuring) and the Lib Dems urging the closure of the Children’s Centres in order to save money. But, Graham was given the last word and the opportunity to put the blame where it really lay – with the government’s introduction of the Poll Tax:

“It has restricted our ability to use our own money and has taken millions of pounds away from the City.”

The BRWP still had a massive job to do and still needed to meet fortnightly. In September and October 1991, the focus turned back to the Recreation Department, and the result of its deliberations were reported to the P&R Committee. It was proposed to keep all swimming pools open, although with reduced ‘plunges’ at Harpurhey, Broadway, Withington and Victoria Baths. The possibility of joint ventures with the private sector was to be examined, since there was no possibility of government funding. Discussions were to take place with volunteer athletics clubs about them expanding their use of, and taking over the operation of, the athletics tracks at Wythenshawe and Boggart Hole Clough. The number of depots used by the department was to be reduced, and the fees charged for burials and cremations were to be increased. This latter decision was very controversial, but the view was taken that Cemeteries and Crematoria should operate at nil cost to Poll Tax payers. The new costs were still below those of the private sector and the charges for the Municipal Funeral Service were not changed. Graham reported to the City Party that:

“This [Municipal Funeral] service remains unique and is a direct and positive way of helping people suffering from poverty… [it] is a cornerstone of the Council’s anti-poverty strategy.”

Setting a Budget for 1992/93
After the disaster of the Poll Tax (see chapter 13), the Tory government planned to replace it from April 1993 with the Council Tax. This was to be a property-based tax (as the old rates were) rather than a person-based tax, but it was to be related to property ‘market’ values, which was completely unsatisfactory. It was clear that it would retain most of the faults of the Poll Tax and also be very expensive to administer. The Local Government Associations had estimated it would cost in excess of £20 million nationally to administer.

The delays in ‘closing down’ the annual accounts were getting to closer to being resolved and in October 1991 two years’ closedowns were achieved – 1988/89 (with a final overspend of £2.1 million) and 1989/90 (with a final overspend of £1.5 million). The 1990/91 accounts were close to being closed down and the projections were that the overspend would also be only around £2 million. Although these overspends should not have happened, these figures (representing less than 0.5%) were very encouraging, given the overall size of the budget. The projections for the current year (1991/92) were that (finally) the employee budgets would achieve a balance at the end of the year, but that shortfalls in income were expected.

The BRWP continued to meet every few weeks to monitor the implementation of the budget cuts and the progress on the redeployment of workers, and reported to the Policy and Resources Committee, but there was still concern about some chief officers not producing the necessary budget information. When the preliminary estimates for the preparation of the 1992/93 budget (the third of the planned budgets as part of the 2-year strategy) were considered at the P&R Committee in December 1991, it was made clear (and minuted) that any chief officers not submitting draft estimates to the City Treasurer would have the City Treasurer’s own estimates used as a basis for calculations. It was also agreed at that meeting that service committees should clear their agendas of all business apart from ‘service plans’ (see chapter 19) and budget matters. The only exceptions were to be “real emergencies affecting life and limb or the financial position of the Council.”

The preliminary forecast for 1992/93 was the most optimistic ever experienced. The provisional SSA was £429.76 million (5.6% increase over the previous year) and the level of expenditure that would be allowed before capping was £433.4 million. As the estimated expenditure for the next year was, at that point, £434.4 million, this meant that there was a possibility of achieving a ‘no cuts’ budget for the first time ever. But there could also be no ‘growth’[20] allowed

The optimism over the improved financial situation was tempered by the accusations in the Manchester Evening News that Manchester was gaining a better settlement from the government at the expense of other Greater Manchester councils. I don’t know why anyone could have been led to believe that a Tory government was favouring a Labour city, but the real reason why things were not looking so bleak for us was the hard work (and pain) that had been gone through over the previous two years of budget cuts. At the January Council meeting, a statement was printed in the P&R report to make this clear:

“Over the past two years, the budget gap (ie the difference between projected income and expenditure) has been reduced by £45 million. The ‘2 year, 3 budget’ strategy is still on target despite the difficulties. We have avoided compulsory redundancies and prioritised the maintenance of front-line services which have been major achievements. Despite press allegations, the Council has not benefited from a generous RSG settlement at the expense of other Greater Manchester local authorities. Manchester got 1.2% less than the average for local authorities nationally. The gainers have been the Shire Counties where the government has been using RSG allocations to protect its political interests. It is notable for example that the Prime Minister’s own constituency settlement has increased by 10%”.

Another frustration experienced by local councils in trying to control their expenditure was that new government measures kept being imposed, which added to their expenditure. One of these changes made by government was in the way debt was accounted for in the ‘collection fund’ and it was estimated that this could cost Manchester £30 million.

At the BRWP meeting on 28th January 1992, the final details of the budget for 1992/93 were considered. The decision was made that the ‘probable’ committee overspends from 1991/92 would be met from central balances (expected to be around £9 million), rather than being carried forward. This was a major concession for committees struggling to meet their allocated cuts. However, the only ‘growth’ to be allowed was for additional primary school numbers and nationally agreed pay awards. Also to be met from the expected central balances was £250,000 over three years for the ‘Arts 2000’ programme (see chapter 23) and £350,000 for the Free Trade Hall, with £3 million being set aside for contingencies and any remaining balances to be carried forward to 1993/94. Progress on the staff redeployments[21] as a result of departmental re-structuring was also scrutinised, with an expectation that all would be completed by March 1992 (although this was an unrealistic expectation).

The third and final budget of the ‘2-year, 3-budget’ strategy was set on 26th February 1992 at £433.4 million (the capping limit), allowing the individual Poll Tax be set at £337.76 (net of precepts), which was much lower than in previous years because of the increased RSG of £429.758 million.

No Good News in ‘92
The General Election in April 1992 which resulted in the 4th Tory win in a row, was an unbelievable shock. Our defeat in 1987 had been a terrible blow, but we had really expected to win this time. Labour had been ahead in all the opinion polls for months and we really believed that we were going to win. Whether it was Neil Kinnock’s triumphalism at the Sheffield rally a few days before that (as suggested by a number of pundits) or other factors, is a matter for debate elsewhere, but for those of us on Manchester Council, the thought of another four or five years under a Tory government engendered such depression that it is remarkable that no-one resigned.

Gordon Hainsworth retired in May 1992, but this had been announced in March, so was not because of the general election result. The City Planning Officer (Ted Kitchen) was appointed as acting Chief Executive for a few months until a new Chief Executive could be appointed. This was Arthur Sandford who was Chief Executive of the Football League and he started work in October 1992.

Despite all the unremitting and painstaking work over the previous two years, many departmental budgets were still not under control. In September 1992, the projected out-turn for the previous year (1991/92) was expected to be worse than the ‘probable’ overspend of £9.769 million and the projections for the current year (1992/93) showed further potential overspends of £9-£20 million. Politicians were concerned that the recommendations from 28th July were not being acted on by some chief officers and the Chair of Finance[22] was instructed to meet with them and their committee chairs to ‘rap their knuckles’. A decision was made to move council departments out of expensive city centre offices (Herriott House, Magnum House, Elliott House, and St James’ Buildings) and relocate them to council-owned buildings. Given the length of time it took to negotiate the ending of long leases in the city centre, this decision should probably have been taken much sooner.

The budget projections for the following year (1993/94) were even gloomier. As mentioned earlier, the new Council Tax was to be related to property values, and the government had overestimated the value of properties in Manchester (and elsewhere – particularly in the north of England). It was estimated that this would lead to a possible shortfall of £1 billion nationally in what Council Tax would raise (£15 – £30 million for Manchester), and would mean around a £60 increase in the standard band D Council Tax figure. The band D figure estimated by the government for Manchester was £400, whereas if spending was held at the SSA level of £408.4 million (the government’s own estimate of what we needed to spend) the figure would have to be around £583. Government calculations also took no account of arrears carried forward from the Poll Tax years.

In November 1992, the final out-turn for 1991/92 was reported to the Council and showed the total committees’ deficit was actually £13.898 million (£4.129 million more than predicted in September). However, the new estimate of overspending in the current year (1992/93) was estimated at around £5 million – much less than had been forecast in September. Although there were continued admonishments in Policy and Resources Committee minutes:

[We have] noted that chief officers have not responded satisfactorily to repeated requests to present alternative methods for tackling their overspends… [The blame for the difficulties was laid squarely at the government’s feet] Despite prudent management of the budget, the government’s mismanagement of the wider economy means that the Council’s financial position is still very serious”.

But, as if all this, and everything that had gone before, wasn’t bad enough, a new crisis was looming. Huge additional cuts of around £30 million were expected for the following year for a range of reasons, including legislative changes and government incompetence. These included the following – a loss of £7 million because the population of Manchester had been underestimated by government; a loss of £5 million because of boundary changes (bits of Manchester going to neighbouring local authorities); a loss of £5 million because the costs of Poll Tax arrears and administration had been underestimated by government; a loss of £7 million because Further Education and 6th forms (costing the Council £22 million) were to be removed from local authority control together with £29 million. There was also an estimated cost of around £3 million to be paid to neighbouring local authorities for the education of Manchester pupils choosing to go to schools outside the boundaries (so called ‘extra-district’ pupils). Although there was a reciprocal arrangement for those coming into the city, Manchester was a net loser of pupils.

Although the Chancellor of the Exchequer had announced that councils would be able to use 100% of their capital receipts for 12 months (having previously only been allowed to spend 50%), reductions in borrowing approvals were expected that would be greater than the 50% and so, far from there being additional receipts available to mitigate expenditure cuts, even more revenue money would be required to fulfil the capital commitments already made.

On 19th November, a comprehensive information bulletin was circulated to the workforce and a very long press release was issued with the following opening paragraph:

“The Leader of the City Council, Councillor Graham Stringer, today described the Standard Spending Assessments imposed on councils by government as ‘the Suicidal Spending Assessments’. ‘They will lead to destructive cuts in services in Manchester and in every other local authority area – except perhaps the favoured Shire Counties,’ he warned. ‘The government is wrecking local government and dragging the rest of the country down with it.’”

The predicted budget requirement (without any growth) for 1993/94 was around £468 million, but the capping limit was £424 million so, in addition to eliminating the overspends from 1991/92 and 1992/93, cuts of around £44 million could be needed.

A special Labour Group meeting was convened on 1st December 1992 with all the projected figures and impact assessments presented in a paper by Graham and Richard suggesting that the Labour Group needed to think about a budget plan for the next four years and either go for a short, sharp shock in one year, or four years of slow ‘haemorrhaging’ as had been suffered over the last three years. A further special meeting was to be held on 6th January to consider the options.

As a first step, it was agreed that all chief officers and their committee chairs would be instructed to eliminate all their overspends. An attempt was made at the Labour Group to amend this by adding – “[overspends] within their control”, but this amendment was defeated. It was also agreed that as many cuts proposals as possible (short of those that would cause compulsory redundancies) should be put forward for consideration in mid December and chairs should produce information on how the proposed cuts would impact on services on a ward by ward basis. An in-depth study of the land and property budget was to be carried out by the chairs of P&R, Finance and Land and Property (ie Graham Stringer, Richard Leese and Bill Egerton) to look at the possibility of increasing rents and generating more capital receipts (ie selling land and buildings) and an information bulletin for the trade unions and workforce was to be prepared. Labour’s Shadow Environment Secretary (Jack Straw) was to be invited to Manchester to discuss the crisis and the government’s attacks on local government.

On the morning of 3rd December 1992, the IRA exploded two bombs in the city centre – one went off outside an office block in St Mary’s Street which didn’t cause any casualties, and a later one went off nearby, damaging the Cathedral and injuring people being evacuated from the area of the first one. Fortunately no-one was badly hurt, but it was a reminder of the situation in Northern Ireland (and a foretaste of what was to come in 1996). The Prime Minister sent a message of support which was reported to the Council.

Despite the unremitting pressure and continual bad news on the budget, the Council leadership continued to put forward a positive spin on the situation and at the December 1992 Council meeting the following aims and objectives were agreed, which were a more comprehensive re-working of those presented to the City Party a few months earlier:

  • To create a wealthy and environmentally friendly city;
  • To ensure that all Manchester residents, irrespective of race, sex, disability or sexuality, participate in the wealth of the city;
  • To reverse the long-term decline in the inner-city population;
  • To ensure that services provided by the Council, its agents or other public sector bodies in Manchester are sensitive and responsive to residents’ needs;
  • To improve the quality of life of Manchester residents;
  • To promote Manchester as a city of regional, national and international significance and to secure infrastructure and facilities appropriate to that status by working for partnership with others;
  • To recognise that the Council’s relationship with residents is based on democracy and citizenship, and ensure that residents are treated with courtesy and respect and afforded every opportunity actually to participate in local government and in the evaluation, planning and development of services;
  • To represent the issues and interests of Manchester residents and ensure that the ‘voice’ of Manchester is heard by key decision-makers;
  • To seek to redress inequalities based on poverty, race, gender, disability and sexuality through action within the Council, bringing influence to bear on others and campaigning;
  • To respect the importance of the contribution made by each member of our workforce to operate the best practice in our employment services and management processes.
Planning for More Cuts in ‘93
The new Chief Executive (Arthur Sandford) decided to take all the chief officers away from the Town Hall for a day “to collectively consider and develop a strategic approach to budget reductions, increased income, and new forms of service delivery on a cross-departmental (corporate) basis; to examine and critically appraise the reduction options so far put forward in light of the council’s existing priorities and the developing strategic approach”. The date chosen was 22nd December, and I’ve no doubt that even the proximity of the Christmas break didn’t lighten the mood.

The special Labour Group meeting planned for 6th January didn’t take place till several weeks later. The level of cuts now looked likely to be around £30 million (around 6% of the global budget) and it was agreed that cuts options of 5% and 10% would be prepared. It was assumed that around 6% of Council Tax would not be paid. At the Labour Party’s Joint Policy Committee it was agreed that the Party wouldn’t take a position on individual cuts and that the Council Tax should be set at a level to allow maximum expenditure up to the capping limit, with any disagreements about cuts at the City Party being referred to the Joint Policy Committee for resolving with the Labour Group.

Although the overall percentage budget reduction being considered was around 6%, rather than allocate this percentage cut to each department, the aim was to protect Education, and specifically, Children’s Services. In an attempt to prioritise some services over others, a line-by-line scrutiny of each service was carried out and a cuts figure allocated. However, after we had gone through this exhaustive process, I did a calculation of each cut as a percentage of the service budget and was horrified to discover that in fact the departments showing the lowest percentage cuts were Finance, Highways and Libraries, with Children’s Services at almost 6%. I wrote immediately (4th February) to Graham and Richard about it and Richard responded the same day to ask me to get the ‘controllable’ figures (ie the budget net of debt charges) from the City Treasurer and re-calculate the percentages.

We hadn’t previously used the total ‘controllable’ figures in our cuts deliberations, but this was obviously a much more meaningful figure to use. This gave a total budget of £292 million from which we needed to cut £24 million, which was slightly over 8%. My recalculation of the percentages cut showed that Children’s Services and Education were relatively protected as planned (6.5% and 7% respectively), but that Libraries and Highways were protected more (at 3% and 4.5% respectively) which wasn’t our initial intention. Also, because the schools budget within Education had been protected (with only a 2.7% cut), the rest of the Education services were getting a 19.6% cut, which was the highest percentage cut of all the other Council’s services, which, again, had not been our intention.

Trying to keep track of whether budgets were being aligned to political priorities became an obsession with me from then on (as it was for Richard).

I argued in the Labour Group that we should be making bigger cuts from senior management – reducing their numbers etc, and somebody (not me) leaked this to the MEN. So another big headline appeared on 18th January – ‘Chop Council bosses says Education Chief’, together with a picture of me from 1988 and pictures of Arthur Sandford, Jim Brooks and Roy Jobson. This of course didn’t endear me to those officers.

Pat Karney invited a photographer to take a picture of the BRWP members at work in one of the Central Library’s committee rooms and this appeared in the MEN on 5th February with the headline – ‘Week of thousand cuts by town hall’s axemen’.

The District Auditor was said (by the MEN) to be threatening legal action against councillors if the £30 million budget gap and the £19 million overspend from the previous two years was not dealt with. Of course the continual reference to these as ‘overspends’ was misleading (and unhelpful) since they were really unachieved cuts. The Lib Dems and Tories continually accused the Labour Group of ‘mismanagement’ and whereas the Tories could be expected to support their government’s policies, it seemed to me to be mere opportunism for the Lib Dems to take this line too.

Budget for 1993/94
In February 1993, the budget for 1993/94 was set at the capping limit of £422.498 million with £24 million of cuts identified and the band D Council Tax set at £679.44 (net of precepts), even though the committees’ overspends from the previous year (expected to be around £12.3 million at that point), still hadn’t been dealt with.

At the two BRWP meetings in March 1993, attention was focussed on committee and departmental restructuring. Given that the effects of cuts, CCT and other legislation had already subjected the Council to enormous stress, it was felt that completely turning the Council structures upside down would be disruptive and dysfunctional, so the changes proposed were limited to those that would more effectively deliver Council priorities and where there were serendipitous opportunities. Examples of the latter being the retirements of the Director of Personnel and the Director of Environmental Health.

In addition to the disestablishment of the Equal Opportunities Unit and the Personnel Department and the changes to the Equal Opportunities Committee (see chapter 15), the Environmental Health Department was also disestablished, with the staffing and responsibilities going to the Housing Department. The City Engineer’s Department was dismantled at the same time, with the Highways and Grounds Maintenance DSOs joining the Operational Services Department. This coincided very much with Andrew Fender and Arnold Spencer’s view in the 1970s that the department should be a split between ‘thinking levels’ and ‘operational’ levels, but the City’s Engineer didn’t like it.

The changes to the responsible committees were not so straightforward. The Planning and Highways committee and the Environmental Services committee were broken up with part of the latter joining Planning to form ‘Environmental Planning’, a part joining the Housing Committee to form ‘Housing and Environmental Services’, and the Cleansing part joining with Highways to form a ‘Highways and Cleansing’ Committee. So there wasn’t an overall reduction in the number of committees as had been hoped, but just a more logical re-alignment of responsibilities, although Arnold Spencer, who was the Chair of Planning and Highways at the time, didn’t like losing political responsibility for major highways schemes. One consequence of these changes was that the Chair of Housing (Dave Lunts) and the Chair of Planning (Arnold Spencer) were able to be elected for a new four-year term of office to the first two of these new committees.

In relation to the Chief Executive’s Department, it was agreed that there should be two deputy positions – one to be responsible for service efficiency, enforced tendering, personnel policies, monitoring and policing, and equality and anti-discrimination[23], with the current Senior Assistant Chief Executive (Howard Bernstein) being re-designated as the other Deputy Chief Executive and being responsible for all regeneration matters including urban programme and economic regeneration, with the Director of Land and Property reporting to him. The Chief Executive was tasked with devising an appropriate grading structure for the P&R Committee to consider.

Carbon Monoxide Death of a Council Tenant
In the middle of this re-organisation, a traumatic event happened that, in Graham Stringer’s view, was the biggest issue that would face the Council over the next three or four months.

This was the death of a council tenant in Harpurhey (Albert Mason) from Carbon Monoxide poisoning. The Council’s Direct Works operatives had recently installed (incorrectly) a new boiler in his house and this had implications for 1,900 other properties. A massive checking and publicity exercise was mounted. British Gas was brought in to help Direct Works with checking all the installations, and leaflets, press and TV were used to alert tenants and re-assure them that all installations would be made safe. The problem wasn’t confined to one estate or to one Direct Works team, so the Chief Executive was tasked with conducting a wide-ranging enquiry – in two parts – looking at the individual circumstances of the fatality, and the organisational implications.

An external expert was brought in to manage the department and assist with the inquiry[24], and co-incidentally the process for appointing a new City Treasurer was set in train as Jim Brooks had been appointed to another Council (see chapter 20).

Given the huge range of issues that the BRWP had considered since its establishment in 1989, it was decided to review, and formalise, its role for the future. This review was long overdue as there was great resentment in the Labour Group about all but the committee Chairs being excluded from this all-powerful, centralised body which made decisions about services without reference to the knowledge and expertise of the members of the service committees. It was agreed in May 1993 that the remit would be restricted to the consideration of the budget process (the detail being left in future to the Finance Committee), politically sensitive issues, and intermediate-sized issues that related to Council policy (formulation, development and implementation). There was also to be a discussion about respective roles between Graham, Richard Leese (as Chair of Finance) and Nick Harris (as Chair of the Service Review sub-committee). The 5-year rolling programme of service audits that were about to begin were to be reported to the BRWP in the first instance and then to the Finance Committee.

Even with this reduced focus, the work programme for the year was huge. In addition to the special departmental and corporate audits referred to above, there were one-off and outstanding items from the current year’s budget and continuing detailed work on the Direct Works and the Land and Property budgets and staffing structures.

For the departmental audits it was agreed that each panel would not be chaired by the departmental chief officer (which had been suggested by the City Treasurer before he left) although each would be a member of the panel auditing their department. Each panel would also have on it, a senior officer from the Chief Executive’s and the City Treasurer’s departments, a senior Personnel officer, and a representative from the District Auditor. At that point (June 1993) there were 14 departments[25], so even over a 5-year period, the task set was enormous, although seen as vital. The Chief Executive and the acting City Treasurer volunteered their departments as the first ones to be subjected to this audit process.

In July 1993, the report into the death of Albert Mason was considered by the Policy and Resources Committee. It was a damning indictment of some of the work practices within the Direct Works Department. Nine staff members were suspended and the Director (Penny Badcoe) resigned. The Technical and Consultancy section was moved to the City Architect’s Department so that there would in future be a clear client and contractor split, as had been previously attempted (see chapter 14), a new strategy was adopted for the phased replacement of obsolete gas appliances, and the training needs for operatives were identified and implemented. The Direct Works Committee was suspended, with a sub-committee of Policy and Resources Committee[26] taking over its role.

At the following Council meeting, the Lib Dems and Tories moved a motion of no confidence in the Chair of the Direct Works Committee (Basil Curley) and proposed the closedown of the department. Graham argued that, whilst not attempting to defend indefensible practices within the department, a properly organised Direct Labour Organisation was still in the interests of the people of Manchester, and the opposition motion was heavily defeated.

Delay in Provisional Settlement for 1994/95
At that time of year, the preliminary considerations of the following year’s budget (1994/95) would have normally begun, but a number of factors made planning almost impossible. The government had decided not to issue its normal July notification of provisional settlement to local authorities, but to wait until the Chancellor’s autumn budget in late November. The bleak prediction was that cuts of between 5% and 10% might be necessary (again). Despite the fact that the government accepted that Manchester needed an increase in SSA of 5.2% to protect vital services (because of pay settlements and inflation etc), it was at that stage only being suggested that it might increase by 3.5%.

A further difficulty was that the government was reviewing the SSA methodology, so there was even more uncertainty about what money could be expected. As if that wasn’t enough, there were proposals to change the responsibilities for a number of services between central and local government. For example, the local Education Inspectorate function was to transfer to the new Ofsted and the Careers Advice function was to transfer to a national body. The additional costs of ‘Care in the Community’ (see chapter 22) were due to be funded from a specific government grant, but this was almost certainly not going to cover the actual expenditure.

The local authority associations estimated that government legislation (Children’s Act, Criminal Justice Act, etc) and changes to demand-led services, would increase local authority expenditure nationally by £1.3 billion. The level of pay awards was also unknown and increases in loan interest would have an impact.

In relation to Manchester’s ‘levels of deprivation’, the government was using 1990/91 data and this meant the likely loss of around £10 million. The county councils were lobbying the government to reduce the weighting given to ‘additional educational needs’ and if this were to be successful, it would significantly reduce Manchester’s (and other city’s) SSA. Also, the government was considering the removal of ethnic factors in the RSG settlement, which could lose Manchester around £12 million. Even though the government were proposing to introduce a ‘damping’ mechanism in order to reduce the effect of massive changes in one year, this didn’t bring much comfort, and the task of budget planning was set to be even more tricky than usual (to put it mildly).

On the plus side, the Office of Populations and Censuses did recognise the increase in Manchester’s population of 4,200, and this was expected to increase the SSA by £1.5 million, but was probably not going to be enough to compensate for all the additional expense expected.

The estimated budget required for 1994/95 was £405.056 million and the acting City Treasurer proposed to cover all eventualities by planning 5%, 7.5% and 10% cuts options – ie £20.3 million, £30.4 million, and £40.5 million.

Staff at Risk
The September 1993 BRWP meetings focussed on the so-called ‘at risk’ staff. This was the term used to describe employees whose jobs had been removed from staffing structures and who were waiting to be re-deployed into a permanent post elsewhere. There were Voluntary Early Retirement (VER) and voluntary redundancy schemes on offer, in addition to re-deployment. The former schemes obviously carried a cost, but so did re-deployment, in that many staff members who had been re-deployed were put in jobs carrying a lower salary – although they had a personal salary ‘protection’, which was frozen until the salary for their new post ‘caught up’. For the individual, this was not a happy situation, but was preferable to being made redundant. There were 423 employees on protected salaries, costing a total of £800,000 (down from £1.2 million at the start of the re-structuring process).

The original number of staff ‘at risk’ was 180, but by September, that was down to 46 (23 in Direct Works, 12 in Education, and 13 in Operational Services). However, imminent re-structurings were likely to produce a further 45 in Social Services (who were expected to find other posts within that department) and 80 in City Catering who were deemed unlikely to be re-deployable (because of there being no other call for their skills, rather than a reflection on the individuals). So, although the number of ‘at risk’ staff was gradually reducing, the number of new jobs available for re-deployees was decreasing and it was becoming very difficult to match the remaining ‘at risk’ employees with the available jobs.

The cost of the ‘at risk’ employees (with their protected salaries) was a deterrent for cash-strapped departments, in addition to causing resentment amongst other employees on lower salaries working side by side with them. So, it was agreed that pay cuts for these people should be negotiated with the trade unions, with the offer of a ‘one-off’ payment to soften the blow of redeployment to a lower paid job. Although District Auditors nationally were challenging the legality of these sort of payments, it was recognised that, in most cases, the cost of redundancy payments would be greater.

Graham Stringer referred to the ‘catch 22’ we were in – to achieve the budget cuts, we had to reduce the workforce, but in reducing the workforce, there were large additional costs to be borne.

In addition to making huge budget cuts, the Education Department had large numbers of staff to re-deploy from the Further Education sector. As Chair of the Education Committee, I felt we had to reconsider our position on redundancy and so in October 1993, I put forward the following motion to the Labour Group:

“This Group believes that we cannot sustain our policy of no compulsory redundancies any longer. Every service committee is currently struggling to achieve the cuts agreed for 93/94. Large numbers of vacancies are being held to offset the costs of ‘at risk’ staff who are not yet re-deployed, and further cuts are having to be made to cover the costs of salary protections. Some departments are only accepting re-deployments on a temporary basis rather than permanently, because they cannot meet the salary protection costs in the longer term. All of this means that service delivery is seriously affected. The prospects for the 94/95 budget are even bleaker than for this year and our re-deployment and salary protection policies are likely to be investigated soon by the District Auditor. In the light of this, I believe that the Group should resolve to:

  1. Consult with the Party and explain the necessity for changing the policy;
  2. Start negotiations with the trade unions on a process for deciding compulsory redundancies.”

The motion was not actually put to the vote as it was clear from the debate that there was very little support for it, although after the debate, many colleagues said to me privately that they agreed with the sentiments, but didn’t want to ‘stick their necks out’. Somebody leaked this to the MEN and a small piece was printed with the heading ‘Education chief Kath faces resignation call’, which was completely untrue, but may have been someone’s wishful thinking.

The latest estimate for a ‘standstill’ budget in 1994/95 was £437 million. The uncertainties because of transfers of responsibilities between local and central government, and changes to the SSA regime (see above) could result in anything between a loss of £32 million, or a gain of £36 million (although the latter was very unlikely to happen). Decisions would have to be made at the December Council meeting, with prior discussions with the Party. The City Party EC agreed that the Group should put forward a list of political priorities (a reverse of the former situation) for discussion in November and that the Joint Policy Committee should decide on the method of consultation.

Chief officers were instructed to find a 20% cut in their ‘administration’ budgets and include senior management posts in this. Further instructions were:

  • Front-line services to be protected wherever possible;
  • need to redress inequality based on poverty;
  • identify and tackle waste and inefficiency;
  • avoid use of compulsory redundancy;
  • develop best employment and management practices available.

It was proposed that a new redeployment scheme be negotiated with the trade unions for employees whose jobs disappeared under re-structuring, with the previous re-deployment scheme ending on 31st December 1993. The offers of alternative employment were to be limited to posts at the same or a lower grade, and there was to be only one offer. Employees would be expected to co-operate, but there were to be no sanctions for those refusing to do so. Where someone was re-deployed into a lower-grade job, the protected salary was to be met by the receiving department for only six months (or when the new job rate caught up to the old job rate, if less time). No more VER or voluntary redundancies were to be offered. Not surprisingly, the trade unions refused to negotiate a new scheme, but it was introduced anyway[27].

In November 1993, the acting City Treasurer painted a gloomy picture. The current year’s (1993/94) overspending was running at £2.2 million, the actual deficit brought forward from 1992/93 was £6.6 million (£2.1 million higher than budgeted for), the Airport dividend was predicted to be £1 million below the forecast, the central contingency budget was £0.5 million short of what was needed to meet demand, and there was still no certainty about the RSG for 1994/95.

One surprising result of the detailed ‘line-by-line’ investigation of all budgets was a report from Welfare Officers who believed that around £1.4 million could be saved by abolishing the ‘Low Pay Supplement’. This supplement had been introduced in March 1987 for employees earning less than £115 per week (predominantly women in part-time jobs), and initially, the thought of touching this budget was regarded with horror. But it seemed that because of Family Credit and housing benefit rules, around 96p out of every extra £1 of the supplement was being given back to the government in taxes. There were 8,025 employees receiving the supplement, but without detailed information about the total earnings of every employee receiving it, it was impossible to decide if it was achieving its objective. So, it was agreed that each employee would be offered a one-off payment as a ‘buy-out’ (see below).

By February 1994, the new City Treasurer (David Martin) was in post and the budget situation was not looking as gloomy as had been predicted in November. As the Airport dividend of £4 million was not needed to offset cuts, Richard proposed that it be used to establish three special funds to enable departments to bid for special projects that would either save money long term, or improve services in some way. These three funds were – an ‘in-house’ development fund (£1 million), an economic regeneration fund (£1.5 million) and an ‘other initiatives’ fund (£1.5 million). But a massive problem was looming with school budgets (see chapter 22).

The budget for 1994/95 was set on 9th March 1994 at the capping limit of £433.529 million. The RSG was £412.867 million which meant a band D Council Tax of £717.57 (net of precepts).

At the April 1994 BRWP meeting Graham grumpily complained that the report on car parking that had been asked for repeatedly over the last 18 months had still not been produced and he threatened to remove responsibility for car-parking from the City Engineer and transfer it to another chief officer.

In May 1994, Richard Leese was (exceptionally) allowed to stay as Chair of the Finance Committee for an additional year, because it was recognised by everyone that there was no-one of sufficient credibility free to take it on at that time, particularly in such difficult financial circumstances.

Value for Money Reviews
In June 1994, we received a very weighty and detailed report on all the reviews and value for money studies that had been carried out during the previous year and an appraisal of those that had been suggested by chief officers (and the BRWP) for the forthcoming year (see Appendix 18B). Transport was highlighted by members as a priority – particularly in relation to Education and Social Services. A previous review of car allowances for council officers (and subsequent decision on reductions) was expected to produce an annual saving of £1.4 million, but the extensive use of taxis was found to be the most cost effective means of officer travel (which seemed to run counter to common sense).

But the budget for transporting pupils with Special Educational Needs to and from special schools was huge and was always significantly overspent (£378,000 at the time). An in-depth study (by consultants) of the Social Services transport operation (for meals on wheels, community transport etc) had recommended significant changes in order to save money. It was decided that before any further work was commissioned, officers from these two service departments should meet with officers from Personnel, Internal Audit and Chief Executive’s to try to thrash out ways of implementing the consultants’ reports. Various attempts to merge the transport systems for transporting pupils and meals on wheels had proved intractable and the trade unions had been very un-co-operative. Despite this high-level intervention, it still proved to be impossible to create a better system and the Special Educational Needs (SEN) transport budget continued to be out of control (until 2010).

At the same meeting in June 1994, the City Treasurer reported on the departments that were unable to operate within their approved budget – Libraries and Theatres, City Architect’s, Education, Land & Property, Leisure Management, City Engineer’s (car parking), Chief Executive’s and even his own! It was particularly galling for the politicians, that the two central departments (City Treasurer’s and Chief Executive’s) were in this position – not only unable to set a good example, but causing resentment from the service departments that were working so hard to keep their budgets under control. In mitigation, the City Treasurer’s problems were outside his control. He had been given responsibility for the centralised ‘City Supplies’ operation, and although it was expected to operate within budget for the current year, was carrying forward a loss from 1993/94. He was also responsible for Housing Benefit payments (£100 million per year), but although the level of payments was determined nationally, small changes in circumstances (unfunded by the government) made a big difference to his budget.

The Chief Education Officer also argued that most of his overspending (£1.1 million) was outside of his control, for example the growth in extra-district payments[28], the higher-than-inflation cost of bus passes, the school meals income shortfall, essential repairs and maintenance in schools, and the cost of funding ‘at-risk’ staff from the FE colleges. Plus the SEN transport referred to above.

But no such excuse could be afforded to the Chief Executive. Overspending on staffing in the ‘policy’ and ‘economic initiatives’ areas had never been tackled, because these areas were felt to be politically sacrosanct, but no longer! The staffing had to be cut to match the budget allocated! Similarly, the excuse given by the Director of Libraries and Theatres that he was “awaiting political decisions about where and how to cut” – thus passing the buck to his committee – was not accepted. The problem faced by the Director of Land and Property revealed a flaw in the system for dealing with ‘surplus’ properties. Apparently he took control of properties six months after they had been declared surplus to requirements by departments, but then there would be an inevitable delay before they could be sold. Meanwhile, they had to be maintained safely (and guarded) until then. It was proposed that departments should keep the responsibility for maintaining properties until they were disposed of and that some other financial incentive would be found to ensure that the Land and Property Department vigorously pursued sales. It was assumed that service departments would monitor and chase them if they were financially suffering, but I thought this was a terrible idea – to have officers spending time chasing Land and Property officers to sell buildings, rather than getting on with their own jobs.

Richard’s report to the Labour Group in July 1994 was gloomy (again). The capital programme was due to be severely restricted for the remainder of the 1994/95 year and for the following year. Government restrictions on the use to which councils could put their capital receipts were due to be re-imposed and tender prices from the building trade were rising dramatically, so even less would be achieved with this reduced money. He reported that the out-turn for the 1993/94 revenue budget was not finalised and was still very uncertain, but that most departments were now in control of their 1994/95 budgets and so were being allowed to remove the vacancy freeze. However, this didn’t apply to the Arts and Leisure Committee or the Education Committee, which were still failing to grapple with their budget difficulties. The Arts and Leisure Committee had only ‘noted’ the Director of Libraries proposals and not instructed their implementation. The problems in Education were of a different nature and a special meeting was convened for Graham, Richard and me to discuss Education cuts in the light of the potential for schools ‘opting out’ (ie becoming ‘grant maintained’) and the thorny issue of funding SEN statements[29].

The first projection for the 1995/96 budget indicated an estimated expenditure of £449.8 million with a capping limit of £431.2 million so cuts of at least £18.2 million (4.3%) were going to be necessary. Also wage inflation was expected to be around 3% whereas the SSA only allowed for 2% inflation, and the capping criteria were expected to be more severe. The plan was to set committee budgets in December and prepare 5% cuts options (yet again).

The BRWP July meetings returned to the thorny issues of car parking and the Low Pay supplement. Cath Inchbold (as Chair of the Highways and Cleansing Committee) had been extremely critical of the City Engineer’s proposed business plan, saying there was – “No customer research or assessment of supply and demand; scant analysis of the scope for increasing income generation or for contract parking, evening charges, long and short stay differentiation etc”. A working group of officers and members (Graham, Richard and Cath) was set up to come up with a better plan, but eventually consultants had to be employed to do the job.

Another working group was set up to attempt to resolve the Low Pay supplement problems (Graham, Richard and Val Dunn (as Chair of Personnel)) and to meet the in-house trade unions about it. Eventually it was agreed that each department should work out the best way of phasing it out for their staff, but that the savings generated should not be offered up as cuts, but be re-invested in training as the most effective way of helping low-paid staff.

In October 1994 the BRWP considered the budget out-turn for 1993/94 and agreed that the overspends would be the first call on the current (1994/95) budget, but that each committee would have to carry forward its own overspending from the previous year unless it met one of the criteria below:

  • Carry forward would prevent a balanced budget in the current year;
  • Carry forward was unachievable;
  • How realistic the current budget was;

However, no carry forward was to be borne by Fleet Management, Leisure Management, Highways Car Parking or Highways Grounds Maintenance budgets. There were also discussions on the management of the city’s parks, the Rochdale Canal, the closure of the Central Mortuary, Fleet Management and Education Transport.

In November 1994 it was decided that all fees and charges would in future rise automatically twice a year (1st January and 1st September) in line with inflation, and be dealt with under chief officers’ delegated powers, so that there wouldn’t be angst and MEN headlines every time there had to be a rise in (say) school meals or leisure charges. Expensive bonus pay schemes were also to be ‘bought out’ using carried forward balances.

Preliminary considerations of the following year’s budget (1995/96) were begun. Around £3.3 million overspends were expected from the current year, but possible reserves built up from previous years of £7.3 million would give an available balance of £4 million. The RSG settlement was predicted to be somewhere between £430.8 and £438.4 million, so cuts of between £4 million (1%) and £11.5 million (2.6%) would be required. Richard made it clear that although this was the best ever situation, it still wasn’t good, in the context of the cumulative year-on-year cuts we’d had and the fact that there was no more slack in the system to be cut. He warned that there were a whole series of problematic issues still to be resolved (including no extra money to compensate for cuts in Section 11 grant from the government), although car parking was expected to produce additional income. Chief officers’ ‘peer group’ scrutiny meetings were taking place and 5% cuts proposals would be brought forward.

This optimism was short-lived as, by December, the provisional SSA was £421.3 million (much less than predicted in November). The capping limit was £434.6 million, and since the current spend was around £443.5 million, there was a budget gap of around £9 million. The new Council Tax regime had a 4% allowance for non-payment (which was an improvement, but not realistic), but all expenditure above SSA had to be met from Council Tax and the current projection for band D was around £50 higher than was felt to be reasonable, so, Richard’s view was that we would have to argue with the government about our inadequate SSA, as well as trying to get the capping limit raised. Graham had written to the Secretary of State for the Environment (John Gummer) asking him to meet a deputation and it was felt that we couldn’t meet the aim of setting the budget in December until these discussions with Gummer had been held. It was agreed to delay setting the budget till February, after the final RSG settlement was known, but to go ahead with planning to cut £9 million.

Graham’s report to the City Party highlighted the perversity of the government in that the allowance for inflation on the SSA from last year was £8.43 million, but the increase in the capping limit was only £1 million. He summarised the absurdity of the situation that local councils found themselves in because of centralised government control – recognising that extra needs necessitated an increase in spending, but cutting the amount of grant and also reducing the amount of Council Tax levied:

“The government controls what it believes we ought to spend (SSA) and then tells us how much we can spend”. [capping limit less than needed]

The meeting with John Gummer was productive and the Group leadership won its argument for an increase in SSA (£7 million, which pushed the SSA up to £420.956 million) and an increased capping limit of £441.632 million. By February, further savings had been identified which brought the expected budget gap down from £9 million to £1.97 million. The allowance put into the budget for inflation was reduced from 3% to 2% (saving £1 million) and a £1.3 million cut was imposed across all committees to be met from non-staffing cuts and increased income (including on school meals). It was also agreed to establish a ‘fund for Manchester’ – a ‘spend to save’ scheme – for example spending on pavement improvements in order to save on accident trip claims. These final measures enabled Graham to predict that there would be no cuts for the next 12 months and possibly for the following two years, which was different from every other city in the country.

The budget was set on 22nd February 1995 with a band D Council tax at £789.47 (including precepts), and a press release was issued which was given front page coverage in the MEN – headlined – ‘Good news budget!’. Graham reported that the healthy financial position stemmed partly from prudent management, but crucially from the city winning its argument with the government. Richard reported that the Council would be able to meet the teacher’s pay award of 2.7% (although it was largely unfunded by government) and spend an extra £2.1 million on primary schools. But he didn’t report that the Council was cutting the early retirement scheme for teachers.

View from the Back-benches
In May 1995, I had completed my four years as Chair of the Education Committee, so ceased to be a member of the BRWP and joined the ranks of the back-benchers who struggled disgruntledly to find out what was going on. Cath Inchbold was elected as Chair of the Finance Committee (see chapter 27) and in June, after nearly 12 months of wrangling and debate, a scheme for paying elected Members allowances was agreed (see Appendix 18C). The benchmark was to be the national median white collar wage based on an assumed number of days worked, although this was a travesty, given that most councillors with a special responsibility (ie committee chair or deputy) worked practically full time.

A new publication was issued in 1995 – the Manchester Report – giving information about all Council services. No councillors were featured in this (apart from Graham Stringer’s introduction and picture) which was in stark contrast to the ‘City Report’ issued in 1987 that had featured every committee chair. The back page listed each department’s contact number and the name of the chief officer, which was ironic given that at the end of the year, a departmental re-structuring was agreed which disestablished five of the departments[30] and replaced them with two new ones.

In February 1996 the BRWP reported to Policy and Resources Committee on the forthcoming budget for 1996/97, which was full of good news (or at least ‘positive spin’). The capping limit had been raised to £453.9 million and the plan was to spend at this level, which would increase the Council Tax by 6.2% (in the mid-range of increases in Greater Manchester). The Education SSA had been increased by £6 million (although the ‘other services’ SSA had decreased by £2.7 million). £5.1 million of ‘efficiency savings’ (just over 1%) had been built in, but the service committees would be allowed to re-invest £2.3 million of these savings in order to improve direct services – apart from Education and Highways and Cleansing, whose savings would have to offset overspends on their 1995/96 budgets. The re-investment priorities were not to be determined by the committees themselves though, but were centrally dictated as: more stock in district libraries; work to prevent youth crime; improved street cleaning in city centre; environmental improvements in back alleys; improvements to meals on wheels; more benefit take-up campaigns and work on improving women’s health.

The other £2.8 million (although if Education and Highways savings were going to their over-spends, the maths didn’t work out here) and income generated from other committees was to be used to provide ‘investment to save’ or for other improvements, such as: a major initiative to tackle disrepair and dereliction of private rented/owned older properties; security measures and energy management schemes in Council buildings and land; ‘grass-roots’ sport to give Manchester children a chance to compete in the Commonwealth Games; City Council training scheme for Manchester 16 year olds; and an expanded Mediation Service for tenants and owner-occupiers experiencing anti-social behaviour.

The £4 million Airport dividend was to be used for ‘topping up’ the Manchester Fund with £2 million (for small schemes to improve street lighting, parks, children’s play areas, pavement improvements etc); for setting up a Schools fund with £1 million (for roof and window repairs, anti-vandalism and security measures etc – school governors to be invited to bid); and for setting up an ‘Anti-Dumplington’ fund with £1 million (for combating the threat to jobs and investment in the city centre, improving pedestrian safety, reducing pollution [sic! – see chapter 26], improving the appearance of the city centre, outlawing illegal trading, and attracting investment). An incredibly ambition programme of expenditure for just £4 million!

The budget for 1996/97 was set on 6th March 1996 at the capping limit of £453.889 million, with a band D Council Tax at £767.41 (£838.36 after precepts).

The End of the Budget Review Working Party
After Richard Leese had been elected as Leader in May 1996 (see chapter 27), the newly elected chairs of committees met to review the operation of the Budget Review Working Party. There was increasing concern amongst back-benchers about the decisions being made, the centralised control, and the over-riding of the role of Labour Groups on committees. In June 1996, Richard issued a report (see Appendix 18D) of the meeting to the Labour Group and the City Party. The report appeared to me to represent a ‘statement of intent’ about the way in which Richard intended to lead the Labour Group in the future, and the key issue was that, although the chairs would continue to meet as a group, the meetings would not be decision-making, nor try to settle inter-committee disputes, nor trouble-shoot.

This in effect meant an end to the BRWP. It had served its purpose, and been a very effective mechanism for achieving a co-ordinated approach and getting the message across to all chief officers that they had to stop acting independently. But it had usurped the role of the committees and taken centralisation to extremes and caused resentment amongst those not privy to its inner workings.

Appendices

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Editor’s Comments

This chapter was quite exhausting and I feel it repeats things that are mentioned in other chapters. I have added the sub-headings to try to break up such a large amount of text, but the breaks didn’t come so easily. I would have liked to have made it shorter, but what to chop? And I have ended up making it fractionally longer by adding more explanation of the BRWP in the opening paragraphs so that it works better in this standalone format. There doesn’t feel to be a story as such to this chapter just a set of things that happened. Something I observes is that throughout it seems as if Kath sees all of the issues with budgets as one long series of crises, but another way of looking at this is that is just the way it is managing a massive diverse organisation, costs always increase, efficiencies need to be found, ways of working need to be reviewed, systems need to keep up with the latest thinking and technology, and the unpredictable events of the outside world need to be responded to. That’s what happens in businesses and that’s what happens in local government. She is often bewildered by the fact that other people can be seeing a bigger picture while still managing the day to day stuff, and not only that can have big ambitions. She sees promoting the positive as being spin, without recognising focusing on the negative is also a spin, or rather both are simply filters. Perhaps I will edit my own thoughts here later?

Footnotes

[1] The members of the BRWP in May 1989 were Graham Stringer, Ken Barnes (Chair of Direct Works), David Black (Chair of Social Services), Val Edwards (Chair of Equal Opportunities), Andrew Fender (Chair of Planning), Kath Fry (Chair of Personnel), (Nick Harris (Chair of Finance), Brian Harrison (Chair of Economic Development), Richard Leese (Chair of Education), Dave Lunts (Chair of Housing), Peter Morrison (Chair of Art Galleries), Kath Robinson (Chair of Leisure Services), Arnold Spencer (Chair of Highways), Niel Warren (Chair of Environmental Services), and Alan Wood (representing the right-wing, although he never attended the meetings).

[2] The new City Treasurer (Jim Brooks) hadn’t been appointed at that stage. I think the previous City Treasurer had left by then and the report would have been prepared by an acting City Treasurer.

[3] For some reason imposing library charges on non-Manchester residents was also rejected by the politicians, which is strange in the context of these other cuts being contemplated.

[4] The away days were weekends at a hotel in Alderley Edge on 18/19 January and 23/24 January. The consultants were Peat Marwick.

[5] This American sporting metaphor – ‘ball-park’ – was introduced by Graham and was used regularly from then on.

[6] The Government’s SSA (Standard Spending Assessment) for Education was £164 million, but our estimated expenditure was £183 million, which meant that £19 million of cuts would be needed. £10m was to be cut from the post-16 sector in the first year, plus a further £4m in the following year.

[7] I can’t remember why just the required £30 million wasn’t borrowed, rather than £200 million, it must have been some legal/accountancy device.

[8] The last payment was in 2006/07, so it actually took only 17 years to be repaid.

[9] In Nov 1992, it was reported that 31.6% of employees were still receiving weekly cash payments and it was estimated that savings of £264,000 – £333,000 pa were possible if they went on to cashless pay, which was eventually introduced from January 1993.

[10] Eddie Turner was appointed as Director of Land and Property in August 1990

[11] Beehive clubs (play centres) in parks and park play areas were transferred to the Under Fives Division in Education (chapter 17); Grounds Maintenance was transferred to the Operational Services Department; River Valley management was transferred to the Planning Department.

[12] Rather than claiming a daily allowance for actual time spent on Council business, councillors were to receive an annual ‘salary-type’ allowance, regardless of how much or little time they spent on Council business. (see Appendix 18C for detail).

[13] In May 1990, the Highways and Planning committees were merged into one. The Trading Services Committee was abolished and so was the Economic Development Committee, but this was more to do with mirroring the changes in the departments, and a Land and Property sub-committee of P&R was re-established (chaired by Bill Egerton) for the new Land and Property Department.

[14] The members of the BRWP in May 1990 were Graham Stringer, Ken Barnes (Chair of Direct Works), Gordon Conquest (Chair of Education), Val Dunn (Chair of Personnel), Nick Harris (Chair of Service Review), Brian Harrison (Chair of Social Services), Richard Leese (Chair of Finance), Dave Lunts (Chair of Housing), Khan Moghal (Chair of Equal Opportunities), Peter Morrison (Chair of Art Galleries), Kath Robinson (Chair of Leisure Services), Arnold Spencer (Chair of Planning & Highways), Niel Warren (Chair of Environmental Services), and Alan Wood (representing the right-wing).

[15] The five roles were: 1) Corporate review of the Council’s main resources; 2) Proper functioning of decision-making processes through committees and delegations to officers (led by Vernon Cressey); 3) Improvements to efficiency and effectiveness of service delivery across the Council (led by Charmian Houslander) 4) Links between the Council and the people of the city; 5) The interface with the private sector and other public sector bodies, in relation to economic infrastructure and regeneration (including the Equalities team). This latter one was referred to as the ‘Executive Division’ – to be headed by the new Deputy Chief Executive (Howard Bernstein).

[16] In September 1991, at a joint meeting of the P&R, Finance and Leisure Services committees, it was finally recognised that achieving £1.9 million of cuts was unrealistic.

[17] In November, the draft SSA had been £408.5 million – 19.9% increase over the previous year. At the Policy & Resources committee in January 1991, the following was minuted – “(RSG) is inadequate and despite his earlier promises, the Secretary of State has done nothing to tackle the fundamental unfairness of the Poll Tax… Manchester will now receive £1.6 million less than the provisional settlement.”

[18] The membership May 1991 was almost the same as the previous year, apart from me replacing Gordon Conquest, Peter Morrison replacing Bernard Stone (Art Galleries), and Bill Egerton replacing Alan Wood.

[19] Frank Hatton House (hostel for youngsters with behavioural problems); Northfields EPH in New Moston; Heyhead View EPH in Wythenshawe; Briarfields EPH in Hulme; Platt Hall (museum); Moss Side Library; Audio-visual Library in University precinct; Manchester ticket shop; Juvenile Remand Unit; A cut of £340,000 to the grants to voluntary organisations was criticised by the Council for Voluntary Service who said it would mean – Family Welfare Association could close, losing 13 jobs; Youth Development Trust will have to disband; Relate could close; Manchester and Salford Methodist Mission day-centre for Alcoholics and Homeless could close; Catholic Welfare Volunteers could close.

[20] Any additional expenditure from one year to the next, including inflation and pay rises, was considered to be ‘growth’.

[21] Awaiting re-deployment – 101 in Education (54 re-deployed), 49 in Architects (39 re-deployed), 190 in Social Services (145 re-deployed), 48 in Recreation (17 re-deployed), 135 in Direct Works (87 re-deployed – only painters remaining to be re-deployed).

[22] Richard Lees was Chair of Finance Committee 1990-95. See Appendix 18A for full list of chairs and deputies of the Finance Committee.

[23] The person appointed to this post in early 1994 was Patricia Coleman.

[24] Clive Pickering was appointed as acting Director of Works in September 1993 and David Martin was appointed in October 1993 as City Treasurer (on a 3 year fixed-term contract).

[25] Art Galleries, Chief Executive’s, City Architect’s, City Catering, City Engineer’s, City Treasurer’s, Direct Works, Education, Housing, Land & Property, Libraries & Theatres, Operational Services, Planning, Social Services.

[26] Chaired by Richard Leese with Val Dunn as Deputy.

[27] The redeployment agreement finally ended in June 1994 and the Council returned to ‘status quo’ pre-1988 – Purple and Silver books.

[28] Children going to schools in other LA districts had to be paid for by their home district, and Manchester traditionally had larger numbers going out than coming in.

[29] The Council had been criticised by the Ombudsman for its failure to issue SEN statements to a number of children. They were not being issued because of the lack of resources to implement the statements, but this was contrary to legal advice.

[30] Chief Executive – Arthur Sandford; Director of City Works – Clive Pickering; Chief Education Officer – Roy Jobson; City Engineer & Surveyor – Sinclair McLeod; Director of Housing – Steve Mycio; Director of Libraries & Theatres – David Owen; Director of Operational Services – Robin Cordock; Director of Planning & Environmental Services – Ted Kitchen; Director of Social Services – Jim Murphy; City Treasurer – Dave Martin. The five departments disestablished were – City Engineers & Surveyors, Planning & Environmental Health, Operational Services, City Architects, and Land & Property. The two new departments created were to be called – (1) Design and Technical Services and (2) Environmental Services. The two Chief Officer posts to be advertised externally.

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