The current way of funding our cities is broken beyond repair

Things are tough – but do they have to be as tough as this?

An increasingly common cry from those in our core cities who have to decide which services can be saved, which ones have to be reduce and which will have to go altogether.  By 2016/17 at the latest it will be obvious that the current way of funding our cities is broken beyond repair.

I’ll use Birmingham as an example. It’s the city I know best and it is the largest city outside the capital. Flaws in the structure always look bigger in Birmingham, a city three times the size of Manchester. But we are not too big not to be allowed to fail .

Europe’s fastest growing young city is also home to the most persistent black spots of unemployment. World class excellence is cheek by jowl with deprivation.

Our cities don’t reflect the national economy they are the national economy. Those who work and live in them need to understand where their wealth comes from, who receives the benefits and who is accountable for decisions.

The money spent on the high visibility services such as refuse collection, tree pruning and fixing pot holes is what most people associate with their council.  The high cost tickets such as safe guarding only touch a relatively small number of people. And just who pays for education is a question few could answer.

Hands up who can explain the financing structure and the formulas used to determine how much a city has to spend. Most voters think that it’s their council tax which keeps their local authority afloat.  Council tax is an increasingly small element and certainly not the answer for the future. Artificially held low over years and now – through the referendum requirement – as good as capped, it’s incapable of providing a sufficient revenue stream, not least because successive governments shy away from re banding.

In Birmingham we have 120 councillors, 40 wards and local elections three years out of four.  The wards are too big to be local and too small to be strategic. Because we only elect a third of the councillors at a time, there are some years where even if the entire electorate voted for the opposition party, there would be no change. And the leader is elected by the councillors which could as few as 65 to 70 councillors.

Cities are complicated as well as complex structures. If given the right framework and structures they will find their own way of doing things.  Appropriate to their needs and serving their communities. But there is a price for that freedom and it’s called taking ultimate responsibility.

The funding structures are too restrictive and increasingly getting skewed towards rural areas and elderly populations. The voters need to be confident that at least a significant part of the wealth created in their cities stays in their cities. And they need to elect the strategic leader of their cities in a direct election.

Directly elected mayors, a local tax base and greater accountability of service providers. Not a perfect solution, but a start. And when decision makers can no longer hide behind bureaucratic structures, services improve too.

Gisela Stuart is the Labour MP for Birmingham Edgbaston

Today is “Cities Day” on LabourList in association with centre for Cities. Ahead of the General Election, Centre for Cities is asking all parties to Think Cities. To read, listen and watch contributions from some of the UK’s leading city thinkers, politicians and practitioners visit www.thinkcities.org.uk