Plummeting land values could hit several council plans in Birmingham
City Council leaders now scarcely bother to deny that social services provision in Birmingham will swing sharply from the public to private and voluntary sector operators over the next few year.
Three-quarters of the council’s elderly clients are already looked after in privately-run residential homes, a proportion that will increase sharply as the full impact of a worsening financial crisis seeps through the system.
Plummeting land values resulting from the recession have presented the council with a perfect excuse to suspend plans to build six more residential and nursing care centres for frail older people. Centres which even last night were still being described as being more like hotels than old people’s homes.
The financial rationale for the ambitious scheme rested on raising some £22 million from closing 29 existing old people’s homes, selling the sites and using the money raised to build the modern care centres. That land is now worth about £4 million, assuming it could be sold at all in the current climate.
Officially, the council is talking about suspending the care centre new-build scheme until the economy improves, but few of those close to social services believe that the remaining six units will ever be built. The body language, backed up by a decision to abandon the meals on wheels service within three years, is all about giving older people more choice and allowing them to make their own decisions about the type of care they wish to receive.
Freedom of choice is a great thing, assuming that clients are presented with real options and are not simply shunted from unacceptable council services to poor private services. It is true, for instance, that people are turning their backs on traditional council-run residential homes and meals on wheels, but this is likely to be as a direct result of the services being neglected over many years rather than any great enthusiasm for the private sector.
This is, of course, the second official acceptance that plummeting land values are derailing grand council plans. The first admission came earlier this year when the local authority was forced to borrow steeply in order to pay for housing improvements.
So many important projects are dependent on raising capital through selling land that the council’s leadership would surely be forgiven for reassessing what is possible, and taking a new view about which schemes deserve priority status.
The new library and Olympic swimming pool, for instance, were to have been partly paid for through land sales. That gap will now be filled through more borrowing.
We shall probably be told that the two are not comparable, but some people might wonder how the council can afford libraries and pools but cannot find the money to build modern people’s homes.
