Some politicians may have already gone on holiday, but the members of Birmingham’s Co-ordinating O & S Committee (which includes me) were in work today for a special meeting to discuss a Labour request for a Call in – on the new library construction: contract approval and update decision.
Some Birmingham MPs have expressed an interest in this subject. Two also recently complained in a debate at Westminster that they would like to attend some of Birmingham Council’s meetings but can’t because they tend to happen when Parliament is sitting. Actually a number of our meetings take place when Parliament is NOT sitting, today’s was one, so here was a golden opportunity for an interested MP to attend. Needless to say, none did.
Edgbaston’s MP recently said on Twitter “Just seen how much they think the new Birmingham library will cost. Can’t believe it.” She would be right not to believe it, because the figure of £590 million which our MP mentioned on her next Twitter post, turns out not to be true. Even the Labour Councillor who was leading today’s request for a call in, after questioning from me, couldn’t get the figure to higher than £384 million and everyone from all parties agreed £590 million was completely incorrect.
For those who don’t understand however, it might be worth explaining why the figure is now higher than the £193 million original price tag.
When you buy a house for, say, £100,000 and take out a mortgage to pay for it, you happily tell everyone that you paid £100,000 for your house. In fact of course, you pay a lot more, because the amount that you pay back to the mortgage company over the lifetime of the loan is more than the original £100,000 you borrowed – because you have to pay interest on the loan. That’s basic economics.
This is exactly what is happening with the new library, only much bigger figures of course and over a period of 40 years. Birmingham has been funding new buildings in this manner since the nineteenth century. It is a long established way of working all over the world. The new New Street Station is being funded the same way – but I don’t recall Labour complaining about that.
The other thing which Birmingham’s Conservative-led administration has done is build in some costs for the maintenance of the building when it is finished. Money will be paid each year into a sinking fund, so that when repairs are needed, the money will be there. This has been budgeted for at the beginning.
This is crucial – and I think the Council should be applauded for it, not pilloried. Lack of maintenance of our public buildings over the 20 years` when Labour was running the city is what has caused our present central library (which was only built in the early 1970s) to now be in such a poor state of repair, and it is also the reason why Harborne now needs a new swimming pool. The Conservative-led administration wants to make very sure our brand new library is not left to deteriorate in the same way.
One of the main reasons why Labour wanted to call in the decision today was to get the true cost of Birmingham’s new Central Library into the public domain. The Cabinet report had been “on the blue paper” – in other words, private. However it was decided to hold today’s meeting in public. A reporter from the Post and Mail sat through the entire meeting. So the figures are now in the public domain – hence why I can comment on them on this website.
What a pity our MP didn’t wait to hear the true figures before she put up misleading posts on Twitter.