The large underspend was questioned by Cambridge’s Liberal Democrat and Green Parties at July’s full council.
You can read the papers here – in particular, item 4a on Housing and Revenue Acct
“Approve carry forward requests of £22,055,000 in HRA and General Fund Housing capital budgets and associated resources from 2021/22 into 2022/23 and beyond to fund re-phased net capital spending
Item 4a – HRA Report to Cambridge City Council
Which is a lot of money. The opposition parties wouldn’t be doing their jobs if they weren’t asking questions about this. You can watch the full debate here with the Executive Councillor for Housing, Cllr Gerri Bird (Lab – East Chesterton) introducing her report. Furthermore the lead opposition spokespeople are at:
The arguments for each of the three parties can stand for themselves for you to judge.
What I’m going to comment on are issues primarily outside of the competency of the city council – which shows how complicated things are for all concerned/involved.
TL/DR?
***Cambridge City Council has neither the resources nor the legal powers to do anything significant about the supply chain and skilled labour shortage issues. It will take a very radical national government to turn these things around while at the same time responding to the fallout from CV19 and the Climate Emergency.***
There.
The longer version is explained in part by Cllrs Lewis Herbert and Katie Thornborrow’s speeches here. I’m going to dig into some of the contemporary historical background which will explore ‘how we got to here’. Because one of the complaints will inevitably be: “Why can’t we produce the components and materials ourselves?” and “Why can’t we train our own people?”
“It’s the economanee, stoopid!”
Or rather, the concept of externalities, structures of industrial systems, alongside a lot of politics and lobbying from very wealthy interests in particular industries.
Let’s use a different industrial example to explore the manufacture of materials and components: Shoes. In particular, a brand that I’ve quite liked over the years – New Balance. Let’s compare the prices of their shoes by place of manufacture:
You can see the price differential.
A simple online search brings up quotations on how much of the brand’s manufacturing business has moved from The West (in their case the USA) to overseas with lower labour costs.
“Back in 1994, New Balance manufactured 70 per cent of its shoes in the U.S. [By 2016] 75 per cent [were made] in countries like China and Vietnam”
p306 of Global Business – connecting theory to reality, (2016) by Paik, Kwon, & Chen.
The firm’s Tier 2 for Feb 2022 supply list also comes up – screen-grabbed from the spreadsheet. You can see the range of component suppliers and manufacturers. Yet the brand remained HQ’d in the USA.
Above – NB suppliers.
How can it be possible to move all those components from country to country, and transport the final product to UK markets and have it still cheaper than what is made in the UK?
This was something that spurred many-a-debate during my university days at the time of the anti-globalisation protests against multinationals using sweatshop labour. It’s still an issue today. (See Fashion Revolution for more). At the time it was seen as a bit of a niche issue along with things like climate change. Then the wars in Afghanistan and Iraq swept those issues off the headlines, only coming back into prominence due to the climate change issue becoming a climate emergency that has finally arrived as many had predicted.
The ability of multinationals to use sweatshop labour – non-unionised, working in factories with with poor safety records. One of the worst incidents in the past decade or so claimed the lives of over 1,000 people in Bangladesh – which has become one of the biggest producers of textiles in recent decades.
Above – number of workers (millions) working in garment factories in Bangladesh – BQMEA /BBC
Aviation fuel and shipping fuel not taxed – the lack of international agreements and enforcement mechanisms
This blog from the World Bank in 2013 explains some of the issues. It explains that because ships are highly mobile by their nature, a combination of economic incentives and corruption make it easy for large shipping companies to register and refuel their vessels in places with little regulation or taxation. This is something trade unions on maritime sectors have long campaigned against – see Nautilus here. Not least because of the historically dangerous nature of working in that industry which continues today.
On aviation fuel, there is an international agreement not to tax it. This by the International Air Transport Association:
“The Chicago Convention, signed in 1944, and subsequent international agreements to establish the framework for the international air transport system to function effectively have recognized the need to exempt jet fuel from taxation.”
IATA – Tax exemption on jet fuel
So what we have had over the decades is both workers (people) and the environment absorbing negative externalities associated with economic activities. This is through:
- People being forced to put up with very poor working conditions to the detriment of their own health and safety (with no comprehensive social security system in place, there may not be any other options to take in order to earn a living to survive)
- The environment being forced to absorb the pollution from the burning of fossil fuels
The ability to import very cheap consumer goods from abroad – produced to the detriment of the healths of people and environments in other countries also acts as a disincentive to invest in manufacturing locally. In that sense, the prices we have been paying for garments has not reflected all of the costs of production.
The free movement of people – and the ascension states joining the EU in 2004 was also a factor in helping keep some wages down. What for me made the issue politically toxic was the inflammatory headlines from the tabloid press alongside the Government’s very poor preparations for public service capacity – in part undermined by the 18 years of austerity that preceded it. One hypothesis is that the rigid and over-centralised structure of UK governance systems meant it was unable to respond quickly and flexibly to build the much-needed extra capacity in public services to meet the needs of those coming to the UK – as it turns out to work in the very sectors that the UK had skilled labour shortages in. Such as healthcare and the construction industry.
The Lords Select Committee on Brexit published a report on UK-EU movement of people in 2017 which looked at
Note the report also covers movement of those from the UK who moved to other EU states.
Above – note the hundreds of thousands of people living in Spain, Ireland, and France.
On top of all of this, we’ve not had the national public policy decisions to invest in:
- public service infrastructure
- transport infrastructure
- renewables energy infrastructure
- training place provision – including new institutions to provide them
- alternative means for people wanting to switch professions
This brings us back to the problems mentioned at Cambridge City Council’s full council – which affect many other areas.
The successive decisions by the Conservative Party to try and see off the threat from UKIP resulted in the road to the EU Referendum and the hard Brexit – which ripped through long-established supply chains that had built up under the single market. There are some similarities between this and the break-up of the Austro-Hungarian Empire in the Paris Peace Conference (The Treaties of Saint-Germain & Trianon) where the Empire’s economy had industrialised as a single economic unit, but was broken up post-1920 resulting in new customs and border crossings that were not there before the outbreak of war. Combine this with “Just In Time” deliveries and the under-investment in suitable storage facilities to build up inventories of stock (something only now being rectified by both the impact of Hard Brexit and also the growth in online retail) and organisations face inevitable delays.
Combine that with failures by ministers to invest in adult education institutions across the country to enable people to switch professions (each new institution for lifelong learning must by law be approved by a Minister of the Crown) along with the failures to publicise how to get into those professions and careers where there are acute and chronic shortages, and we have the inevitable outcome that we heard about at the council meeting. It’s not just ministers – it is companies too. In Cambridge’s case, as soon as a qualified town planner shows even a hint of competence they are snapped up by the private sector on a much higher salary – the council barred from paying ‘the market rate’ by the various legal and bureaucratic restrictions ministers and Parliament impose on local government. As economist Frances Coppola states, firms don’t want to take the financial hit of investing in their staff knowing that a competitor might be there waiting in the wings to snap them up.
We used to have a rich and diverse infrastructure for lifelong learning.
I acquired and digitised the following from the last millennium – before Thatcher’s cuts of the early 1980s:
- A history of adult education (effectively to WWII
- Preparation for Crisis (effectively WWII-1980)
- The last report of the Advisory Council for Adult and Continuing Education (before Thatcher abolished it)
Note in 2021 the House of Commons Education Select Committee called for a renaissance in lifelong learning, with a new learning centre in every town. Previous governments have focussed what limited funding they have provided into basic literacy and numeracy courses, and generic entry-level courses. (e.g. business administration, customer services, hospitality, construction, digital skills, and so on).
What’s also missing is provision of technical level courses and training for lifelong learners in those fields where there are shortages, as well as the graduate/postgraduate level courses in things like town planning and civil engineering. Despite the shortages of town planners in and around Cambridge, Anglia Ruskin University does not offer either town planning modules or qualifications *at its East Road Campus* – and nor are there the funding streams in place from outside organisations and central government for potential students to undertake such courses.
It’s not like ministers were not warned.
I’m looking back over the past quarter of a century as much as anything else. Three public policy proposals that have been lacking include:
- A mechanism for firms that employ graduates to pay a training levy
- A mechanism for local universities and colleges to respond to signals in the local labour markets to provide courses for people to train and qualify in those sectors with the shortages
- A mechanism to pay the tuition fees and living costs for students of all ages in the form of grants, not loans, in those areas with the shortages
But again ministers over the decades have chosen not to do this, relying on a broken system of fees and loans that in the longer term is showing itself to be unsustainable. You only have to look at the ongoing industrial action by the Universities and Colleges Union across a number of universities to see symptoms of this.
“So…what should councillors do?”
It’s not something the city council can solve on its own. It can however, get together with neighbouring councils to find out what their shared needs are, then bring in the chief executives of course providers and college/university leaders to agree on a new set of courses and qualifications that in the longer term can help fill some of those gaps. Because otherwise local councils will find themselves blamed for being the blockage in the system that actually has much deeper roots than might appear at first glance.
Food for thought?
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