There was grim news the other day from Birmingham City Council as it announced £600m of savings would have to be made between 2012 and 2017. This is likely to result in the workforce shrinking from 19,000 full-time employees to just 15,000.
The Council leader, Sir Albert Bore, said Birmingham would have to “start decommissioning services” and foresaw that the financial crisis would lead to “the end of local government as we have known it.”
Amongst all the bad news for city residents and council staff, a big question mark hangs over the future scope and scale of the road maintenance programme.
Birmingham is one of a small band of authorities that have contracted out their roads programme, in this case to Amey, in what are essentially PFI deals. The company’s website explains the scope of the project:
“Amey is responsible for improving and maintaining Birmingham Highways infrastructure, including 2,500km of road network, nearly 100,000 street lights and over 850 highway structures and bridges across the city. Additionally, we deliver a wider Corporate Social Responsibility (CSR) element within the contract that aims to benefit the local community through various initiatives.
“The contract has a 25 year service delivery period which includes the improvement and repair of roads in Birmingham, maintenance of footways, bridges, street lighting and traffic signals along with the upkeep of street scenery, such as safety barriers, seats and trees.”
The key point lies at the start of the second paragraph. Amey has, presumably, a legally binding contract with the council to carry out the work for a quarter of a century. Which means that if it keeps its part of the bargain then the city has to keep paying up, no matter what other demands there are on its financial resources. On the one hand this would appear to be good news for road users – and the businesses which depend on a smooth running transport network – in the West Midlands, and there are positive reports from councillors about the success of the deal. But on the other hand it raises questions over the nature of long-term contracts in times of shrinking public budgets.
The RAC Foundation has long argued for more long-term certainty around road provision and management, and the government is considering introducing five-year funding and spending plans for the Highways Agency-managed roads, just as there is for railways (the High Level Output Specification and Statement of Funds Available). One of the reasons a broader horizon is needed is exactly to counter the hand to mouth existence created by varying political pressures now being seen in Birmingham. However if all services are outsourced on a contractual basis then where exactly do councils make cuts? Just one more thing to consider in tough times.
