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Panel warns Birmingham to 'modernise' to survive

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Birmingham City Council must modernise its approach to industrial relations if it is to “survive and thrive”, according to the government-led intervention team.

The Birmingham Improvement Panel today announced it had disbanded itself at the end of March, four years after it was established following a report by Sir Bob Kerslake into the council’s governance and finances.

A panel report today states while it agrees with the council’s own assessment that Birmingham is transforming, it “remains to be seen” whether progress this year will be sustained.

It adds: “The situation with regard to industrial relations, in particular, is precarious. The resilience of much of the council’s progress is yet to be tested.”

The second major strike action by refuse worker in 15 months ended last month but the dispute overall cost the council an estimated £14m.

The council agreed to pay each worker £3,500 after a series of walkouts over claims of “secret payments” made to non-striking staff.

The panel said reports by Birmingham’s cabinet highlight that the dispute has created a risk of “contagion” as the way the dispute was settled could lead to similar demands and disputes in other services.

It added Birmingham must modernise the way in manages industrial relations to “mitigate financial risks and pave the way for the organisational culture change and service transformation needed if the council is to survive and thrive.

The panel said it was unusual the council leader and cabinet members had been engaged in day-to-day negotiations with trades unions and this “presents the risk of a return to the position at the time of the Kerslake report, when blurring of member and officer roles was a key cause of concern”.

Birmingham is described as reverting to “fire-fighting” when dealing with industrial disputes, with senior politicians and officers diverted “away from taking a strategic perspective”, leading to “slippages and deferments in the delivery of planned improvements”.

The panel also said Birmingham’s chief financial officer Clive Heaphy, who joined the council in January 2018, has spent most of his working hours in mediation talks with unions and colleagues about industrial disputes.

This situation, the panel said, “is by no means a criticism of [the chief finance officer]” but raised questions over whether the council has the “capacity and capability that it needs at the top of the organisation”.

“Permanent changes in the finance team’s work culture and capability are urgently needed,” it added, but attempts to address this had been “compromised” by Mr Meaphy’s focus on “industrial relations emergencies”.

The latest section 24 report by the council’s external auditor said the council faces “a unique level of one-off risks”.

However, the panel said the “hands on” approach and “clearer direction” of chief executive Dawn Baxendale had been appreciated by senior staff, while the developing corporate management team has “much more of the capability and experience that the council so desperately needs”.

The council is described as having “achieved a tighter grip on its finances and improved analysis and monitoring”.

Leadership teams were said to have shown “concerted determination and coordinated their efforts while seeking to address the council’s refreshed priorities for improvement”.

The panel said cabinet members appreciated a change in political leadership style which introduced more “debate and joint working” after Ian Ward (Lab) replaced John Clancy in 2017.

Scrutiny functions have also been strengthened, with an increase in the number of committees.

Ms Baxendale said: “We have made significant progress in improving our relationships with external partners, building a focus on performance and much better control of our finances but challenges remain and there is more work to do. 

”My focus is now to work with my officer team and members to make sure that we do not lose the drive around our improvement.”

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