The weight of the UK’s concrete crisis

This is an audio transcript of the Political Fix podcast episode: ‘The weight of the UK’s concrete crisis’

Robert Shrimsley
They’re trying to win this debate by saying it’s really not that bad, whereas the logical politics of this is to say it is bad and we’re on it.

[MUSIC PLAYING]

Lucy Fisher
Hi, it’s Lucy Fisher here with Political Fix, the FT’s insider guide to Westminster. You heard there the FT’s Robert Shrimsley talking about the government’s handling of the crumbling concrete crisis that’s now beset more than a hundred schools. And Robert’s here with me in the studio. Hi, Robert.

Robert Shrimsley
Hey, Lucy.

Lucy Fisher
Also here is the FT’s Stephen Bush. Hi, Stephen.

Stephen Bush
Hi Lucy.

[MUSIC PLAYING]

Lucy Fisher
So we’ll get into the details of the bubbly concrete crisis in a moment, as well as the effect of bankruptcy this week of the UK’s biggest local authority. But let’s kick off with what I thought was most interesting story this week in the longer term, which was the Labour reshuffle. And Robert, I thought it was a pretty bold shake-up from Starmer. He brought back people like Hilary Benn, probably a bit overdue. There were promotions for talented individuals like Peter Kyle and Shabana Mahmood, and it really made me think it does actually look now like a Labour leader preparing for government.

Robert Shrimsley
Well, that’s good, because that’s what he would like you to think and everybody else to think. Yes, I think that although there were quite a lot of headlines about, you know, the return of Blairites and this kind of thing, which has a certain truth to it, I think the two things that struck me about it . . . or three things. Number one is, as you say, it looked like a shadow cabinet being formed with a view to these are the people who are going into government. And we’re now getting on with trying to look serious about government. The second thing is there are a couple of areas where I think he buffed up the attack because people have been a little bit underperforming or a little bit quiet. He’s brought in others who might be a bit more aggressive . . . 

Lucy Fisher
Go on, name names.

Robert Shrimsley
Well, like Shabana Mahmood, for example, justice. I just think she’s a very gutsy performer who was rather behind the scenes as the campaign co-ordinator and did a good job and is very much on side with Keir Starmer, very much of the Labour right. But also a very feisty operation. I think crime and justice is an area where they can do a bit more. The other thing that just slightly struck me is that when you look at the shadow cabinet, there are more shadow cabinet members than there are places in a real cabinet. And so I also think he’s created a little bit of internal competition, which is no bad thing.

Lucy Fisher
Stephen, what was your take?

Stephen Bush
This is primarily a reshuffle where I think actually the useful lens is not, you know, Blairites. It is former special advisers, right? There are more former special advisers around the shadow cabinet table than there were the Brown government in 2010. I think that reflects how important institutional memory is to Keir Starmer’s conception of how institutions work, how they become effective.

Lucy Fisher
And also Angela Rayner was one of the big moves. I mean, to my mind it makes sense to put her in levelling up and again increase the attack there. I think it was possibly not at its maximum pitch under Lisa Nandy. But has Starmer stored up a problem by effectively demoting Nandy? She does carry some clout still in the party, doesn’t she? 

Stephen Bush
Well, no. Yeah, I kind of think that she doesn’t, right, which isn’t essential, right? The important thing he has to do in this reshuffle in order to give him the space to do everything else was to unfiddle, to say it in, you know, in a peachy, friendly way, unfiddle the mistake he made in his first reshuffle when he couldn’t move her, couldn’t move Angela Rayner. He had to put her in the shadow chancellor of the Duchy of Lancaster and created this situation where in this role and in opposition is sort of effectively your spare voice was held by someone who was not a close ally and would have meant giving this role of the prime minister’s “vicar on earth” in office to someone who’s not a close ally. And, you know, one of the things he failed to do in that reshuffle was square off his most powerful internal rival. He did do this time essentially by saying, and what jobs do you want? And then of the list of jobs that she wanted that were being held by people who themselves weren’t too effective or system critical to move, you know, sorry, I don’t like to come on here and, you know, pour scorn on people who have just been sacked. But ultimately, Lisa Nandy’s tenure in the local government brief had made her the sackable available job. And in some ways, although it’s not a job that she particularly craved, she has still ended up with like a pretty good consolation prize in terms of internal Labour politics, which is international development, you know. So in some ways I do think some of the briefing from some of her allies was not helpful because it annoyed lots of Labour MPs who feel about the development job the same way Tory MPs do about, say, the defence job. To hear someone describe that as a demotion, you know, one Labour MP did essentially kind of come up to me very angrily go like, you know, it’s disgusting that someone in the Labour party, the Labour party, would say that this job that was held by, you know, and then listed a bunch of former Labour international development secretaries. But the reason why she’s there is she was weak enough to move.

Robert Shrimsley
I do think the other point about Angela Rayner is that she’s also had to reach a bit of an accommodation with Keir Starmer. We often talk about the John Prescott role under Tony Blair and this figure with more cred with the left, more cred with the unions and the Labour party who was sort of shield for a more right-ish Labour leader. And we often say Angela Rayner is going to play that sort of role. But in the first couple of years of Keir Starmer, she didn’t really play that role very well, whereas more recently I think she’s made more of an effort to stick with him when he said they weren’t going to reverse the two-child policy on benefit. She was loyal on that. So she’s also showed, I think, that she’s prepared to be more of a team player, which I think, by the way, is wise. Because although she’s terribly important and potentially dangerous in opposition, if Keir Starmer wins a big election result, then he can do what he likes. So she’s wise to get on the bus.

Lucy Fisher
Yeah, I mentioned Hilary Benn being brought back from the backbenches, which struck me as an obvious move, particularly to the Northern Ireland brief where he knows the law. And it’s a brief that Keir Starmer, as a former DPP, cares about. I was also struck by Darren Jones getting a big promotion, the former chair of the business committee who’s quite a smoothie. To me that makes sense in going in as a shadow chief Treasury secretary. And finally, Chris Bryant I thought was an interesting move. He’s very savvy on the media. He’s good at attack but not always good at toeing the party line, Stephen.

Stephen Bush
Yeah. I mean, also, yeah, in terms of the other subplot of Labour’s relationship with the media, he is a fully paid-up member of the let’s do Leveson 2 full media regulation group. Now, given that one of the things the Labour party would like is the endorsement of the Sunday Times, because it’s, you know, emotionally resonant that I thought was quite a punchy appointment for that reason as well. And also, as you say, he’s someone who I think has enjoyed the freedom of being on the backbenches. And yeah, I mean, I remember shortly after David Lammy was reappointed to the front bench, him kind of telling allies, you know, well, look, I’m gonna have to relearn how to be a loyal member of a front bench, and I think Chris Bryant will also have to relearn that kind of thing.

Robert Shrimsley
I mean, I do think given Keir Starmer’s role in the prosecutions of some journalists, that’s probably a fond hope getting that endorsement, isn’t it?

Stephen Bush
So I think you’re right. I’ve never been able to convince myself of a universe in which they do get that endorsement, but they, yeah, they are going for it.

Robert Shrimsley
Yeah.

Lucy Fisher
Robert, last weekend at the FT Weekend festival, you weren’t able to join us on the live panel of Political Fix, partly because you were preparing to interview Rachel Reeves. What did we learn from that interview about how Labour is preparing for government?

Robert Shrimsley
Well, I think we learned that they’re jolly serious about this, that they are not going to leave any hostages to fortune. Now, a few days earlier, she had ruled out the idea of introducing wealth taxes. Although that’s such a nebulous phrase, there’s still plenty of scope for wiggle. The way that she answered questions on that, the way that she answered questions on Brexit, but also the way that she talked about the need to plan long-term to rebuild the fabric of the country, and the impression that I took from it, I don’t know that I learned a phenomenal amount that was new, but I just got you really got the sense of the force of someone who is absolutely determined they’re gonna get there this time.

Lucy Fisher
Is that sensible to be so cautious, or is it a bit of a turn-off?

Robert Shrimsley
Well, it’s a balancing. I definitely think cautious is better than reckless. I definitely think the bulk of the job for an opposition is reassuring voters that they are safe, and they can be trusted. And Labour is putting an immense amount of time into that. I think if we’re still saying in eight months’ time, are they being too cautious, then the answer will be yes, they are. But if they can begin over the course of their party conference in the next six months to unveil a sense of how they’ll actually change the country were they to win, then I think they probably got it about right.

Lucy Fisher
Let’s come back to that in due course, but for now, I think we’ve got to turn to Gillian Keegan. We’re a week on now from her announcement just days before schoolchildren were about to go back for the autumn term, that a hundred, more than a hundred schools would have to close because of crumbly concrete. Stephen, how do you think the government’s handling of this crisis is going?

Stephen Bush
Oh, I mean, pretty badly, right? I mean, so I think we focus first on the political handling, right, which is then, broadly speaking, the government has sounded like an old government in talking about it, right? You know, that way that, you know, when you talk to someone who has been a minister for a long time, they’ll be really across the issue, they’ll talk very interestingly about trade-offs from the kind of perspective of the kind of policy champion we all like and enjoy. But in terms of the thing that anyone wants, who’s affected by something, wants to hear in terms of reassurance, it’s like talking to a Martian, right? And it has been Martian-style communication, you know. “Most schools aren’t affected.” Well, you know, as a friend of mine who is affected by this said, they said, OK, well, I only have one child. (Lucy laughs) Yeah. So a hundred per cent of their childcare is affected by this scandal. You know, and I think the biggest problem, right, so obviously, the problem they can’t fix is the fact that it’s always been easy to cut infrastructure spending rather than day-to-day spending. The consequences of a very tight budget we’ve had for, you know, the last 13 years were inevitably going to have some maintenance backlog issues, right? So they can’t fix the kind of policy problem. But the political problem of them doing this kind of very bureaucratic, kind of almost like they’re trying to sort of win a debate with stressed parents is just so poorly done. And I think in terms of seeing this row partly as a stress test for how they’re going to approach this very long election campaign, if I were a Conservative MP with a majority of, say, 10,000, I might be able to hold on in the right circumstances. I’d be looking at this and going, oh, maybe it’s time to, you know, phone Odgers Berndtson and get my CV out there.

Lucy Fisher
I like the way you put that. You are trying to win a debate with stress parents. And Robert, it does feel like that, the statistic that they keep deploying is that less than 1 per cent of schools are affected. But it doesn’t really wash, does it?

Robert Shrimsley
It doesn’t. It’s something very whiny about the way the government is conducting this debate. You know, statistically they have a point: 1 per cent, but it’s 147 schools. I think as Stephen says they’re trying to win this debate by saying it’s really not that bad, whereas the logical politics of this is to say it is bad and we’re on it. The bottom line is, you know, they are simply reaping the whirlwind of 14 years in power when you can’t blame stuff on anybody else anymore. And some of it is actually on you. You know, they did cut the school building program in the middle of the austerity drive. And the truth is that all governments, this government included, have a stop-start approach to infrastructure. The first thing that goes when money gets tight is you stop the long-term projects because there’s no immediate votes in them. And the more they talk about it this way, the more they remind voters that they’ve been in power a long time, and you really can’t blame anybody else.

Lucy Fisher
And what about Starmer? He’s trying to push his advantage here, trying to attack Sunak by saying he’s out of touch. He’s not personally affected because his kids are at private school. Do you think that’s an attack line that works, that people sort of read insouciance from Sunak and think it’s because he’s wealthy and doesn’t have to participate in this status?

Robert Shrimsley
When you look at the margins, I’ve never been convinced about the “he’s wealthy” attack line. I don’t think the public care if they think you’re trying on their behalf. I think the attack line surely is a degree of anger that this is the state of our country. You’ve been in charge for 14 years. What the hell is happening to our country? That seems to me the attack line, and I think “you don’t care” personalises what is a bigger political attack potentially.

Lucy Fisher
And Stephen, the Tories are trying to counter by saying, well, look, this is a bigger problem in Wales where Labour have been in charge for quite some time. Do you think that works for the voters in England?

Stephen Bush
No, I think the history of attempts to use Labour’s record in Wales showed it has never been that effective. You know, I think this is a shame in lots of ways, but with the greatest of respect to the devolved government in Wales, I think the average voter in England, which is 80 per cent of all voters in the UK, basically like why am I being made to hear about the decisions of a town council? And broadly speaking, if there is a much-better critique of the Welsh government, is that after 24 years, the Welsh economy essentially means that every public spending decision they make is determined by the size of the grant they get from Westminster. So it’s very hard on infrastructure spending to have a plausible line of attack that isn’t also Westminster’s fault. And also English voters don’t give a flying (inaudible).

Robert Shrimsley
And I think the point is, what I think the Conservative approach of the “it’s only 1 per cent” misses is that the crumbling school buildings becomes a metaphor for a wider issue about public services. And it plays to the sense that a lot of those things aren’t really working. And, you know, one doesn’t have to go into the whole broken Britain, you know, hyperbole, but Britain isn’t working like it should be. And that’s the difficulty for the Conservatives because what the school buildings issue is is a physical manifestation of a sense that people already have.

Lucy Fisher
And my contention is that the many people who don’t pay attention to the news in their busy lives will have caught two headlines this week and will conflate them, even though they’re quite different. One will be the schools, crumbling concrete schools having to close, and the other is Birmingham Council going bust, which we’ll talk to William Wallis of the FT about shortly. I think people will draw this together and just think, well, these are two stories probably about cuts that have happened over many years coming home to roost. But before we move on, I think we need to speak about how Gillian Keegan, who’s has been handling this. We’ve talked about how it’s reflected on Rishi Sunak. Robert, what did you make of her hot-mic moment?

Robert Shrimsley
Well, it was . . . I mean it’s rough. I don’t think that the broadcasters totally covered themselves in glory by doing this, but a seasoned professional knows you have to be careful. I mean, I think it’s a problem for Gillian Keegan, who’s very widely liked, I think, at Westminster, and many of the reasons why people like her sort of came out a bit. She’s very plain-spoken. She’s direct. She’s quite funny, very down to earth, and a lot of the time these are very attractive political traits. But every now and then they can jump up and bite you. And I’m afraid that particular moment just looked a bit too entitled. People don’t want to hear that you’re working hard. They expect you to be working hard. There’s no prizes for effort when you’re a secretary of state. So I think it just goes to the broader point we were discussing. The government just looks like it doesn’t get how angry people are, even though I suspect she absolutely does. But it was a bad, bad moment for her, and she’s already out of favour a bit with Rishi Sunak.

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Lucy Fisher
So as we mentioned, the other big story this week is the effective bankruptcy of the UK’s biggest local authority — in fact, I think it’s the biggest local authority in Europe — Birmingham city council. The FT’s William Wallis is in Birmingham. Hi, William.

William Wallis
Hello, Lucy.

Lucy Fisher
So explain to us how this has happened. It’s about an equal pay compensation claim. But has this council merely been unlucky, or has it been badly run over some time to fall into this trap?

William Wallis
It’s about an equal pay problem that has been rumbling and getting worse since I think it first kicked off in the in the late 90s. You got lawsuits culminating in a Supreme Court ruling that led to a settlement, and further claims have come since then. So in total, the council has been looking at liabilities nudging on £2bn. And when you think that Birmingham, like every council in the country, has been under immense strain as a result of the decade of cuts that took place between 2010 and 2020 when it lost about 40 per cent of its income coming on top of that, the new liabilities that have emerged, which are worth about between £650mn and £760mn, have essentially been the tripwire. There are other problems that have happened, such as an IT system which is costing a lot more than it was supposed to. But certainly without this equal pay thing, Birmingham would have got through and in some ways has actually been very well-run.

Lucy Fisher
So what happens now? The council has to halt spending on the vast majority of services other than those that it has a statutory duty to provide.

William Wallis
I was speaking to a journalist, a local journalist in Croydon yesterday. Croydon has had a similar problem, although for different reasons, since early 2020. Just to get an idea of what happens over the medium term to a place that is living on essential services only. And it’s a pretty grim picture that in Croydon the public parks have gone to ruin. What libraries that are left are only partially open. More worryingly, some of the charities that depend on support from the council to support some of the most vulnerable people in more deprived areas have lost their funding from the council and a whole string of things that start to be eroded. And when you think that many councils are already under such great strain because of inflation and because of increasing demands for adults and child social care, it’s a grim picture. So Birmingham is facing essentially a period of fairly severe austerity.

Lucy Fisher
It does indeed sound bleak. And you sketch out the real-world consequences of this. Just tell us, what do they have to keep providing by law?

William Wallis
Well, there’s a statutory obligation to provide an adequate library service. What that actually is, is a bit vague, but Birmingham has a huge public library in the centre of the city. That presumably could be one of the things that suffers. But the most important statutory obligations are to adult social care, child social care, child prevention services — those types of things.

Lucy Fisher
And what about bin collections? Do they continue?

William Wallis
(Laughter) Yes, they do.

Lucy Fisher
Thank God. Now, Birmingham follows Thurrock, Croydon, Slough and Northamptonshire in issuing a so-called Section 114 notice. Should we be on the lookout for any other councils about to go bust?

William Wallis
There’s also Woking earlier this year. My understanding is that there were about 20 to 25 councils that are in severe financial distress and interestingly, sort of under the radar on the day that Birmingham declared its Section 114 notice. Stoke-on-Trent warned that it was teetering on the edge of having to do so, too. And what’s interesting about that is that, to my knowledge, Stoke has no peculiar circumstances that might tip it over the edge that you had in Thurrock, where the council had an investments scheme that went madly wrong, and Woking similarly. All the councils that have effectively gone bankrupt so far have had quite specific circumstances. What’s worrying is that across the board, councils of all political colours are saying that they are experiencing financial distress on a scale they really haven’t before. And they are all saying there needs to be a broader systemic solution to the problems that local authorities are having with their finances beyond this piecemeal approach that we’ve seen so far.

I think one that’s interesting is that clearly one of the questions that’s now going to rise is the extent to which the government is prepared to offer any kind of bailout or assistance to Birmingham. And initially, at the moment, the Conservatives are clearly slightly enjoying the misfortunes of a Labour council, jumping up, and I think this is what happens when Labour runs things, and there’s a good attack line. And we can show you the misfortunes of having Labour leadership. On the other hand, we’re talking about Birmingham here. This is not a place that you can just ignore. It’s a place where Conservatives have MPs in the wider environs and want to keep them. It’s got a Conservative mayor of the West Midlands who also won’t want to preside over this. So I think one of the tensions that’s going to come up is the extent to which the Conservatives really are prepared to just let Birmingham languish with these problems.

That is a very interesting point on the politics of this. And I think Andy Street, the mayor for the West Midlands, is in a tricky position like that. So far, he’s coming out saying that both the West Midlands Authority will have to step in to an extent, and he’s also saying the government should provide some support so I think there is this tension. And also, is there not a danger that as with the schools issue that the wider public is not deceived by that and knows that a large part of the problem is that local councils across the country, including Birmingham, were starved of resources in recent years?

Stephen Bush
There’s also . . . presumably there are equal pay problems like this bubbling under both in other councils and also in local government pension schemes, right? So the government will presumably be aware that Birmingham’s problems today are probably quite a few local authorities’ problems, you know, fairly soon.

William Wallis
Indeed, that’s true. And beyond those two issues, pensions and equal pay liabilities, there are others, too, that are looming. The councils have been able to keep, for example, their budgets for special needs off the balance sheets. But by 2025, we’ll have to put on the books that spending that’s taken place over many years. And then when it comes on the books, it’s going to call a whole range of councils to have very serious financial difficulties. So whoever wins the elections next year will find the financing of local authorities is going to be looming very large as a problem.

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Lucy Fisher
William Wallis, thanks for joining us.

William Wallis
Thank you so much.

Lucy Fisher
So we’ve just got time left for Political Fix’s stock picks. Stephen, who are you buying or selling this week?

Stephen Bush
I am going to buy Shabana Mahmood, the new shadow justice secretary. She’s already got a lot of sort of internal clout and plaudits through her role as campaign co-ordinator over the last few years. She’s one of the people who is really credited for turning around lots of Labour’s processes internally. But she now essentially has a role where her job is to, basically to be Yvette Cooper’s anger translator on the crime and justice brief. I think that will certainly annoy some Labour activists and some people in Labour’s liberal core, but it will win I think a lot of plaudits in Westminster. And she is going to be a big part of the kind of the Labour offer in terms of what the country as a whole sees. So yeah, I think now’s a good time to buy shares in Shabana while the price is still within my budget.

Lucy Fisher
Robert, who are you buying or selling?

Robert Shrimsley
So I’m going for a brief share sugar rush spike. I’m gonna buy Rishi Sunak because he’s heading off to India for the G20 summit — a trip I think you’re going on, Lucy.

Lucy Fisher
I am.

Robert Shrimsley
And I think it’s gonna be quite a remarkable event. You know, the sight of a British-Indian prime minister arriving in Delhi — I think he’s going to get a really, really big reception. And people in Britain are gonna notice this, and they’re going to be reminded of why Rishi Sunak is different and interesting and also a bit fresh. And that’s a positive for him. I also think it’s a hell of a moment for India that, you know, what, it’s 70, 75 years after independence, to see a British-Indian leader arriving. I think it’s a big moment for both countries, and I think it’ll get a lot of attention. So buy now, sell soon after.

Lucy Fisher
May I just say, Robert, I think that is something of a sweetener after you wrote what was a marvellous column, but a very hard-hitting one this week, saying that the Tories are now past the point of collapse.

Stephen Bush
It’s basically insider trading, right? (Lucy and Robert laugh) He’s talking about the Rishi Sunak stock in his column, and then he’s buying in a knock down . . . 

Robert Shrimsley
Damn, he spotted that. I did say buy and sell quickly afterwards. It’s a spike, rather than the long-term hold.

Stephen Bush
I think the interesting thing is I think on paper that is a great argument. It is a huge moment of symbolic resonance in British and Indian history, while also in global history, right? But I think, you know, one of — I know I’ve said this several times on this pod — but one of Rishi Sunak’s mis-steps is that he hasn’t, I think, talked up enough what a historic moment his leadership is. If I were them I’d be getting some friendly magazine journalist to go on the trip with me. Because if you think about like there’s kind of great bits of photojournalism of the 20th and 21st century — Merkel and Macron hugging at the World War One centenary, you know. It ought to be like that, but I don’t think it will be.

Lucy Fisher
Absolutely. And I think while he’s facing such a tough time at home, there will potentially be scenes of, you know, him being mobbed and given this hero’s welcome in India, which will do a bit of positive for legwork for his reputation.

Robert Shrimsley
What about you, Lucy?

Lucy Fisher
As for me, I’m going to buy Peter Kyle, who I think is not a household name yet, but is likely to become one, tipped by those that know as potential future leader of Labour. He’s — Robert, you’re raising your eyebrows. We’ll come to your view in a minute. He’s been in the Northern Ireland brief. He’s just been promoted on the Labour front bench to the science, innovation and technology brief, very much the portfolio du jour, and I think if he has a good result in Mid Bedfordshire, where he’s been running the by-election campaign, he’s really going to be on the up.

Robert Shrimsley
No, I wasn’t raising my eyebrows specifically. I agree with you. I just thought, future leader, he probably won’t thank anybody for that. (Lucy laughs) But I do think that the one thing I think is worth saying, it’s telling that two of our three picks are people who got a better job in the shadow cabinet reshuffle, which is probably the mark of a good reshuffle.

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Lucy Fisher
Robert, Stephen, thanks for joining. And that’s it for this episode of the FT’s Political Fix. If you like the podcast, do subscribe. You can find us through all the usual channels to receive episodes as soon as they’re released. We also appreciate positive reviews and ratings. It really helps spread the word. You can find FT articles linked to today’s podcast topics in our show notes. They’re free to read for Political Fix listeners. And don’t forget to sign up to Stephen’s award winning Inside Politics newsletter. You’ll get 90 free days. Political Fix was presented by me, Lucy Fisher, and produced by Audrey Tinline. Manuela Saragosa is the executive producer. Original music and sound engineering by Breen Turner. Cheryl Brumley is the global head of audio. We’ll meet again here, same time, same place next week.