20170720 Things to note at WMCA Board
Edging through summer as we are, I am suspending a week of annual leave to ensure that you do not have to read the welterweight agenda pack (just over 400 pages) for the July edition of the West Midlands Combined Authority (WMCA) Board. Public service in action.
Anyway, it has been an exciting month at the WMCA. A permanent Chief Executive has been appointed: Deborah Cadman, currently the Chief Executive of Suffolk County Council.
She will replace the Interim Chief Executive, Martin Reeves, in September, which will enable him to return full-time to his substantive role as Chief Executive of Coventry City Council. While I (as a relative noob to local government) don’t know what she is like firsthand, my non-scientific poll of people who generally don’t talk shit think she is brilliant — thinks about whole places, networks of people, systems, and does partnership well. Sounds good to me. The Board will approve her salary at today’s meeting, which comes in at £187,000.
I also wanted to highlight a little something from our WMCA Overview & Scrutiny (O&S) meeting — we chose our Deputy Chairs, a decision which will need to be ratified next meeting. They are Councillor Ian Shires (Walsall) …and me. I am a bit pleased (hiding it well though), and both of us are thinking of ways to make this a meaningful role. Any suggestions to that effect would be warmly received.
Minutes — 23 June 2017
A couple of personal ‘Matters Arising’. It doesn’t seem to be elsewhere on the agenda, but worth noting that the WMCA has made a submission to Government regarding further devolution, as of around a week ago. I have kept vaguely up to speed with the sorts of things it is likely to cover, but the submission is not yet public, so am not able to confirm what has made it in. Worth watching, although we will have to wait until the Parliamentary recess has elapsed before getting more details, I suspect.
Also, I am going to note the hell out of this:
Regular readers of these summaries will remember my efforts of the last few months or so, relating to the Greater Birmingham & Solihull Local Enterprise Partnership’s refusal to take up their position on the WMCA O&S Committee. The snapshot, which came out of Councillor Peter Hughes’ (WMCA O&S Chair) update, shows that we have made some progress in addressing it. I didn’t let it go, and Peter backed me up in that. Good teamwork.
Finally, it’s worth viewing all of the agreed points on the Commonwealth Games bid:
On (2), note that £250,000 is a significant percentage of the WMCA’s General Fund — 13%, given that it had around £1.8m in the general fund at the end of March 2017, which was already noted to be “significantly below recommended levels”. This will obviously have been subject to change, but having cash in the bank is part of managing risk, and it would be nice to be assured that the sum was not being taken from the general fund. Usable reserves sit at around £45m according to the accounts (p95), so there is some limited flex.
On (3), this is understandable, but Birmingham’s choices on how they fund the Games (particularly given (5)) if the region wins the bid will have an impact on the WMCA and its work, beyond the impact suggested in (4). So worth watching future Birmingham City Council decisions on this. Getting the Commonwealth Games here would be wonderful, but leaving legacy means doing this right.
Update: The Mayor and WMCA Structures
Deborah’s appointment forms part of this update, but there are some other interesting parts (a couple of which are dealt with later in the agenda). Firstly, Mayor Andy Street has been invited to sit on the Midlands Engine Strategy Board, and has accepted subject to Board approval of this report. Noting the overlap in purpose, strengthening the influence of the region within the Midlands Engine is sensible — particularly given the relative prominence of the East Midlands in that arrangement to date.
It may also be good tactics. It may be not sensible to speculate on national politics right now (my predictions have been total bobbins for over a year now), but in these depressingly not-devolved times when central Government controls nearly everything and is endlessly trying to control more, you never know which tier of local/regional Government they will condescend to deal with next. Mayor Andy Street is a rare friend to the current Government, but goodness knows how many Governments he’ll see before 2020 dawns.
The West Midlands Leadership Commission
You only need to look around the room at a WMCA Board meeting to understand why this might be required. Diversity is consistently cited as a strength of our region, but some of our most powerful institutions and prestigious sectors do not look like the places they serve. They are older. There are fewer people with caring responsibilities. They are less ethnically diverse.
So, the West Midlands Leadership Commission:
…will explore how we can realise our commitment to sharing the prosperity, success and in particular the leadership of the West Midlands with all of the diverse communities in the region.
The idea is that the Commission will work with existing groups to understand the barriers and to formulate a strategy, including some ‘quick wins’. It will be chaired by Anita Bhalla OBE (Chair of Performances Birmingham Ltd, Board Member on the GBSLEP) and will report to Mayor Andy Street and the WMCA Board via Steve Eling, the relevant Cabinet Member.
It sounds good, but it isn’t the first and won’t be the last of such efforts. I await the membership of the Commission (and how it intends to talk to the people it intends to analyse) with interest, at any rate. I’d be interested to see whether links are made with the Mayor’s Mentors as part of this.
WMCA Funding for Growth Programme
Picking up on Mayor Andy Street’s earlier assertions that he intended to pursue fiscal devolution (or, in plainer language, control and reshaping of our tax and public spending arrangements), the establishment of the Funding for Growth Programme (FGP) is a promising step towards words becoming reality:
FGP seeks to bring together the Mayor’s manifesto pledges with the pre-existing work on this undertaken by the WMCA. It will explore both new powers around tax and spend that the region could get, but also, ways of funding the region’s ambitions more broadly:
For such a potentially engaging and exciting piece of work, it seems pretty…closed. For example, p25 of the agenda pack informs us that:
Brainstorming of new innovative funding ideas undertaken by external experts
I mean, fine. I love a good expert. But what is the harm in broadening that out a bit, to the myriad other experts in the region (and beyond)? Generating ideas is a pretty safe thing to apply a lot of minds to. And some minds weren’t exactly pushing the boat out the first time around.
Initial recommendations are supposed to be ready by the end of 2017, to enable setting the 2018/19 budget. With the sums we are talking about, £50,000 (which covers costs of support until September) doesn’t seem like a bad investment, but worth keeping an eye on this, just in case the costs start to creep up.
It would be good to see all of the Metro Mayors and Sadiq Khan co-ordinating on some of this work — collective asks from regional government have the potential to be quite powerful. London’s recent work on fiscal devolution is referenced.
Minutes of the Investment Board — 26 May 2017
Apologies for adding a whole section for this, but it is my quote of the papers:
He was optimistic that the ‘Optimism Bias’ would be reduced.
Crying. CRYING.
Minutes of the Audit, Risk & Assurance Committee — 16 June 2017
I was drawn to this:
A question had been posed by the Chair concerning the scope of the committee in light of the number of arm’s length and connected bodies to the West Midlands Combined Authority, such as the West Midlands Growth Company.
It’s a good point, and a good spot. The business of this committee is ensuring things are done properly, and that is hard to guarantee when things change so quickly, or when an already Byzantine decision-making process becomes more complicated still.
Irritated to see that the meeting was inquorate — also true of our last Overview & Scrutiny Committee. A high quorum isn’t a problem if the members (read: the appointed councillors) are committed, but this suggests they aren’t.
WMCA Performance Management Framework
This is the first full update of the WMCA Performance Management Framework. Despite being a body which overwhelmingly uses debt to fund big capital projects, a much wider array of performance indicators are measured. These indicators are still too narrow, and as previous meetings highlighted, are to be broadened out. But the level of challenge here, securing good social, environmental and economic outcomes from (overwhelmingly) capital budgets is not to be underestimated. Partnership matters — particular in reforming and funding public services. Future devolution deals matter.
So, we are doing well on some indicators: GVA, number of jobs, wages, number of businesses, and number of business births (p51–52 of agenda pack, p60 for a broader infographic). Some of our challenges — notably on the number of people who have no qualifications, are moving, slowly, in the right direction. However, the number of youth claimants of unemployment benefits, and claimants more broadly, are on the rise.
Most significantly — in that it is arguably a whole-system measure — our “fiscal gap” (how much we raise in taxes vs. how much we spend) has increased by an eye-watering £0.6bn to £4.5bn, notably because of social care pressure. Closing this gap is the challenge that the WMCA has set itself, so this is pretty bad news. It highlights the lack of progress on the Public Service Reform area of work during the lifetime of the WMCA.
Do not underestimate how serious this is — taken in combination with some of the other failings (p62–64), the picture is one where we are spending more on services while things get worse for those who are poorest. I don’t expect instant results (true reform takes generations to play out), but I expected a more nuanced picture of the trajectory by now. Should the appointment of a Director of Public Service Reform slip, we could be looking at early 2018 before it is even anyone’s job to lead this.
Trying not to be in despair, but we are trying to do something substantial while a Government of incompetence so mighty that it defies definition by any language I possess, has its already limited capacity absorbed by Brexit, which in itself will turn all of this on its head. And no-one seems cross enough about this, or at least, not usefully so. The Secretary of State, Sajid Javid, insulted the entirety of local government to its ACTUAL FACE (at the LGA Conference — so I’m being unfair, the LGA is probably working up to sending a strongly-worded email or serving him cold soup at the next dinner).
#breathes
Anyway. This is the sort of thing which should be part of a live data dashboard, a place where you can see, quickly, whether we are on track to meet the goals we have set for ourselves. That way, people can hold us to account, not just for being on track, but for the things we measure in the first place.
Swindon Borough Council do this brilliantly.
I believe the datasets can be requested from the Black Country Economic Intelligence Unit, but we can probably do better than that, can’t we?
Annual Accounts 2016/17 for the West Midlands Combined Authority and the West Midlands Integrated Transport Authority Pension Fund
Time to approve some accounts, which seem to have met the approval of the External Auditor. #flex We need to create some ceremony around this. Is there a WMCA quill that Mayor Andy Street can use to sign them?
I’m not going to dwell at length on this, but there are some elements that illuminate what the WMCA does with its money. E.g. this summary of monies allocated to “other services”:
The strategy around the aforementioned reserves is one worth banking (so to speak):
The WMCA believes that the reserves set aside for risks and to provide funding to back capital investments are sufficient with the general fund available to meet unexpected short-term requirements. Details of financial risk management are shown in note 29 to the financial report.
Short-term requirements, as long as they are very small.
Also, a small wtf on p104:
A revenue charge is also made to provide for the repayments of the former West Midlands County Council inherited debt of the WMCA.
That hasn’t been around for a while, lads. I think I was three years old when that was mothballed? So, 31 years later, we’re still paying for it, and (in some cases) still talking about it.
Unsurprisingly, some of our financial risks were created in Westminster and Whitehall (sorry, I am on one today):
Currently legislation only allows WMCA to borrow for its transport investment programme. However, discussions with HM Treasury are continuing and it is hoped the required legislation can be progressed following the formation of the new Government post General Election in June 2017. Additional legislation requirements regarding business rates retention also required to fund the programme are awaiting progression by the newly formed Government.
Hope in the narrative around one’s accounts, whatever next. Note also that Mayor Andy Street’s power to levy on business rates to fund infrastructure investment (following a ballot) is also snagged up in all of this.
Establishing West Midlands Development Capital Limited
Another new body of the WMCA — wholly owned, with the remit of acting as its fund manager.
That means, on its establishment, it will act for the Collective Investment Fund and the Land Remediation Fund, replacing Finance Birmingham (which had the notable downsides of being external and, let’s face it, something which mentions Birmingham in its moniker).
Note that West Midlands Development Capital Ltd will be established in such a way that the Constituent and Non-Constituent Members of the Combined Authority will be able to become shareholders enabling each to use West Midlands Development Capital Ltd as their own fund managers should they wish. Further legal advice is being sought regarding the appropriate shareholding arrangements should other Authorities wish to become members in the future.
