It has frequently been said that the short-term outlook of bankers led us down the road, via very risky loans, to the financial crisis from which the world is still trying to extricate itself.
Now we have the news that Birmingham is also paying a very heavy price for short-termism, with news that the council’s total equal pay bill, built up over more than a decade, stands at £1.1 billion.
Back in March, councillor Barry Henley (Lab, Brandwood) described the then £890 million total as a ‘monument to our incompetence’.
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Having seen that bill rise by about a quarter, bursting through the billion pound barrier, it is perhaps now more a landmark of incompetence and one, which like the Great Wall of China, could be seen from space.
The political focus is now rightly on how this should be settled, with the council busy looking down the back of the proverbial sofa for stuff to sell – the NEC is among the more likely options.
But behind the scenes there is much wailing and gnashing of teeth over just who is blame for the debacle.
Looking back it was a collective series of short-term decisions over a long period which led the local authority to the financial abyss. The Single Status agreement between Tony Blair’s Government and trade unions was made in 1997, allowing different public sector jobs to be compared for equal pay purposes – for example, a female home care visitor could rate her role against the male road worker, and of course they found the men were eligible for all sorts of overtime, shift and on call allowances which were not given to the women, opening the door to discrimination claims.
It took until 2003 for Sir Albert Bore’s first Labour administration to look at the issue seriously and set aside a few million in the 2004 budget to equalise pay. Raising women’s pay had simply not been a priority, and more pressing matters took over. The no-win no-fee lawyers who came along later suggested that the councils were worried about upsetting their more militant male workers.
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By the time the Tories and Lib Dems took over in 2004 Labour had left some money in the budget, but again short-termism took over and this was whisked away and put to use elsewhere. A few years later the lawyers were sniffing around and the council’s HR department was spooked into action – drawing up a new salary structure for staff. By this stage the financial meltdown was beginning and it became clear that raising everyone’s pay would not be affordable, so some had to be cut.
The staff were of course not pleased and strikes were called. After a couple days of walkouts the Tory-Lib Dem leadership struck a deal with the binmen. With local elections looming it was thought to risky to allow them to leave black bags piled high in the streets.
While all this was going on the HR department, lead by Coun Alan Rudge, was getting advised by both internal and external lawyers, to challenge the claims at court – and got beat.
They have blamed the uncertainty around developing case law for this, but all the same settling might have saved grief later on. The aim of averting strike action also failed as two years later, when equal pay was finally implemented, strikes coupled with extreme winter weather left much of the city without bin collections for a month.
In a recent interview council chief executive Stephen Hughes, who joined the council in 2004, said that action should have been taken during the early part of the decade, pinning the blame firmly in his predecessor Lin Homer’s and the then Labour administration’s court.
He also defended the later decisions to renew bonuses for the binmen saying that the scars of the 1970s and need to avoid strikes still dominated their thinking.
But others in the council are in no doubt that Tory-Lib Dem administration’s decisions to go to court, and then to extend inequality another two years, to avert a strike, exponentially increased the liabilities.
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It seems that no-one escapes the blame over this period and a series of short-term choices has had far-reaching long-term consequences for the city.
The phrase ‘people in glass houses shouldn’t throw stones’ was perhaps most aptly demonstrated at this week’s social cohesion scrutiny committee.
Labour chairman Waseem Zaffar is, according to his critics, a man who craves and loves the political limelight a little too much.
To his supporters he is an astute political operator who uses social media and his limited scrutiny role to engage with a much wider audience.
Coun Zaffar was keen to find out whether the 150,000 people who have viewed council webcasts were different people, or the same few hundred watching over and over.
He asked if Tory councillor Gareth Moore had generated multiple hits repeatedly watching his own speeches.
Quick as a flash Coun Moore replied that this was a bit rich as the committee could be more accurately described as ‘the Waseem Zaffar Show’.
And Coun Zaffar found little comfort from his Labour colleague, Cabinet member for Social Cohesion John Cotton, who added that he was delighted to be a ‘guest’ on his show.