Sheffield City Council have been in the headlines a lot recently, but for all the wrong reasons; namely, the felling of thousands of street trees throughout the city, and the response to protests that have erupted to stop them. 33 police officers were deployed earlier this month to safeguard the removal of a single tree. Two protesters were arrested days before – including a 74 year old man – at the site of tree felling works in the suburb of Dore. This may seem extremely heavy handed to an outsider just reading about this for the first time, but highly organised and persistent protests (lead by Sheffield Tree Action Groups, or STAG) have been happening since at least 2015 with the intention of disrupting contractors carrying out the work. These protests started out small, but have been gradually increasing in intensity over the years, leading to multiple arrests and threats of legal action against the Council. A couple were even accused in January of serving poisoned tea to workers outside their home.
The tree felling isn’t exactly popular with people outside Sheffield either. Bianca Jagger and Ken Loach have spoken out publicly against the tree felling. Jarvis Cocker recently branded the tree felling as “crazy”. Even Michael Gove has called for Sheffield Council to stop the “unnecessary destruction of trees”. It’s safe to say that Sheffield Council aren’t exactly the most popular local authority in the country right now.
Streets Ahead: 25 years of PFI
This saga began in 2012 when Sheffield City Council signed a 25-year highway improvement works contract with Amey (a well-known private infrastructure contractor). This contract includes many benign things such as the resurfacing of roads, replacement of street lights, and pavement safety works, but also includes the assessment and possible removal of thousands of Sheffield’s 36,000 street trees, with those felled being replaced with saplings. This project was branded “Streets Ahead”.
This is a classic PFI (private finance initiative) contract. PFI contracts give the private sector the responsibility to build and maintain public buildings and spaces whilst still allowing the public to use and benefit freely from said spaces. This – in theory – frees the local authority from having to spend loads of money hiring, training, and retaining in-house construction and maintenance staff, and – again, in theory – transfers the financial risk of a project over to the private sector. On the surface, this makes some sort of sense. In theory, at least, it works like this: 1) the local authority pays a private contractor a lump sum to deliver some work, 2) the private contractor has contractual obligations to deliver the work to the standard and timescales layed out in their contract, and as the risk is moved across to the private sector, the work gets delivered on time and to a decent quality, and 3) the authority pays a nominal fee for regular maintenance going forward. Simple, right?
Well, no. A recent report by the National Audit Office makes it clear that there is a distinct lack of data available on the practical benefits of private finance procurement. Furthermore, there are countless examples of PFI disasters that have ended up costing the public sector disproportionately more than predicted. For example, Parklands High School in Liverpool has been closed since 2014 but is costing Liverpool residents £4.3 million a year due to being built using PFI. It was built in 2004 and closed only after 10 years due to incredibly low pupil numbers. Unfortunately, the council signed a 25 year deal with the PFI contractor which ties them into paying for the shuttered school even though it’s not being used.
Another well-publicised example of the problems with PFI contracts is the £333 reportedly charged to a hospital to change a lightbulb (and within that same article is an example of a school charged £300 for an electricity socket). This may seem far-fetched and unlikely, but it’s not hard to find sources for other similar extortionate PFI fees, e.g. the £100 charged per light bulb at the Met Police, and “£466 to replace a light, £242 for a new padlock and £75 for an air freshener” at various NHS institutions.
So, why use PFI at all?
Well, the National Audit Office report states: “Private finance increases departments’ budget flexibility and spending power in the short term, as no upfront capital outlay is required” (page 12). This is extremely attractive to councils for a few reasons. For one, councils are having their central government funding cut at an astonishing rate – 75p in every £1 of core government funding to councils will be cut by 2020. This wouldn’t be so bad if they had a reliable way to make up that funding shortfall, but central government has imposed a legal cap on the amount councils are allowed to raise council tax year on year. This cap was set at 1.99% for many years. As of 2018, however, councils can now increase council tax by 2.99%, with some councils being allowed to increase it by a further 3% to fund social care services.
This may seem like a large increase, but the reality is that it is still not enough to make up for the astonishing funding cuts from central government. Councils will still struggle, despite the cap increase. They’re effectively stuck between a rock and a hard place. They can’t raise their own money, but Westminster won’t give them any. What, exactly, are they supposed to do?
This ludicrous situation came to a head in February this year when Northamptonshire County Council went effectively bankrupt. Whilst undeniably sad, it’s notable that Northamptonshire is a Tory run council, and what has happened there has been caused by an ideology set by central government. For example: their council tax rates were below national averages, but rather than increasing the tax to meet local demands (a large increase in adult social care costs) they decided to freeze the tax – a move popular with Tory voters, but completely at odds with the needs of the council. As stated in The Economist, the National Audit Office has warned that other councils are doing the same, a practice that is not “financially sustainable”. It estimates that a tenth of all councils with responsibility for social care could empty their reserves within three years if they carry on spending at the rate they did in 2016-17.
Rather than being a lone example of financial mismanagement, Northamptonshire may end up being the first in a long line of council bankruptcies.
Council tax inequality
Another big problem with this system is that council tax rates are extremely variable across the country, with the poorest councils often charging the most. The extremely wealthy London Borough of Westminster has the lowest council tax rates in the entire UK, and residents of the City of London – where residents tend to earn the highest salaries in the country – pay lower than average amounts of council tax. This might seem astonishingly unfair on the surface, but there’s a straightforward explanation: wealthier councils have far fewer expenses than poorer councils. They have fewer people on benefits, fewer people in social housing, and fewer people in social care. They simply don’t need the extra revenue. Things are obviously a bit different in poorer councils like Middlesbrough and Rotherham, but these councils not only have very little power to raise the needed revenue; they also face the prospect of making their own residents even poorer through huge council tax increases in order to provide the basic services needed for other people in the local authorities, which is bad for both the residents and the council. After all, a steep council tax increase could be the trigger that pushes a working poor family over the edge into needing financial help from the council, which could end up defeating the purpose of a council tax increase in the first place.
Local authority catch-22
This is a classic catch-22. Local authorities are having almost all of their central government funding cut and so need to raise council tax to make up the funding shortfall. Central government, however, has imposed a legal limit for how much they can raise council tax, meaning that councils are losing money and unable to raise the lost revenue themselves. Oh, and they face the prospect of making their own residents even poorer through crippling council tax rises needed to pay for council services, which impacts how economically productive the residents can be, which in turn impacts what sort of houses they can afford and hence how much council tax they pay.
What, exactly, are councils supposed to do?
Cash-strapped councils driven towards PFI
Unsurprisingly, local authorities have every incentive to make financial decisions that reduce their outlays. They also have every incentive to do this in a way that keeps services accessible to the public. Hence: PFI.
Sheffield Council are no exception. They aren’t exactly flash with cash. They have been raising council tax right up to the legal cap for the past three years. Raising council tax this steeply for this amount of time is a risky move that could cause further economic problems to the city’s residents: South Yorkshire’s economy has been hit as hard as Greece’s since 2000, and the Centre for Cities’ data tool shows that Sheffield has the lowest average weekly workplace earning out of every major city in the UK:
Furthermore, the council is continuing to run its council tax support scheme into 2018, which offers 77-100 percent discounts on council tax to roughly 52,000 residents (almost 10% of the city). There are almost 67,000 full-time students in Sheffield, all of whom don’t pay council tax at all. Finally, there has been a £20 million social care overspend in Sheffield caused by multiple factors including a steep rise in children taken into social care between 2016-2017 (caused itself by increases in poverty and changes to the benefits system), cuts from central government, and the fact that Sheffield has a larger number of older people in care compared to other similarly sized local authority. As the previously linked article states, “Council reserves currently stand at £12m but bosses say using this in its entirety is ‘not financially viable’. Local authority chiefs will now decide on the possibility of further cuts to areas such as parks, libraries and highways along with temporary use of reserves with plans to replenish them”.
It’s safe to say the council’s funding situation is dire at best.
Ok, so what about the trees?
Not only are Sheffield Council seriously financially struggling, they are legally obliged to maintain and protect public rights of way, including the removal of any obstructions. Unfortunately, one of the best assets of the city – namely, its street trees – are also a potential obstruction to the public right of way, and could potentially cause issues for disabled people access the city’s public spaces. As such… well, you can see where this is going.
The council has a a legal responsibility to maintain the public right of way, and so – just like any other cash strapped council in the country – entered into a PFI deal to carry out this work over the next 25 years. Amey promised to maintain and protect the public right of way, including any obstructions. As a private contractor attempting to make a profit, however, they have absolutely no incentive to do anything that isn’t the most basic, practical option necessary to fulfil their part of the contract. Of course, we’ve seen how this approach has worked out for the street trees.
Surely there is a better option?
I’ve seen so many articles like this one, written by an educated, thoughtful landscape architect at a company in Sheffield, arguing passionately that given the “complexities and inherent potential of a city street, I believe such projects and their objectives should have been forged from a collaborative multidisciplinary team, including arboriculturalists, landscape professionals, ecologists, highway, civil and drainage engineers and probably a good few more”.
Nothing said here is incorrect. In an ideal world, this is obviously how things should be done. The problem is that Sheffield Council clearly doesn’t have the money to pay for something this involved and complex. They don’t even have the money to do their highway maintenance work in-house, and had to turn to PFI instead. How could they possibly hire a “collaborative multidisciplinary” team to assess the street trees? When local authorities are struggling to pay for basic front line services like adult social care and libraries, is it any surprise that street tree engineering has been bumped to the back of the queue?
On the topic of street tree engineering, this article from New Civil Engineer has a rather telling few paragraphs:
“Currently, trees are classified as either dangerous, dead, diseased, dying, damaging footpaths or properties or “discriminatory” – for example obstructing wheelchair users – before a decision to fell them is made. A list of 25 engineering solutions are considered alongside felling, but only 14 of these can be carried out within the contract.
Sheffield City Council told New Civil Engineer that budgetary pressures had forced their hand. It said that “huge budget cuts” meant that “careful consideration” had to be given before exploring the other 11 options, and documents presented by the council to the High Court said there was “no money for unfunded solutions outside of the PFI contract framework”.
The solutions not funded within the PFI include the altering of line markings or carriageway kerb lines, footpath deviations, use of geogrids, use of fill instead of a sealed surface, reduction in road widths and conversion of footways into verges, road closures, changes to contract specifications, the creation of new footways or the closure of old ones.
Engineering solutions allowed within the PFI are: the use of thinner profile kerbs, excavation for root examination, ramping or reprofiling, flexible paving or surfacing, removal of displaced kerbs and filling in of pavement cracks, root pruning, root shaving, root barriers and guidance panels, tree growth retardant, the creation of larger tree pits, heavy tree crown reduction or pollarding to stunt tree growth and retention of dead, dying, dangerous and diseased trees for their habitat value.”
As is clear from these paragraphs, the terms of the contract are extremely specific and leave no possibility of flexibility (this is actually one of the main problems with PFI contracts). What can the council do to change this?
Very little, sadly. Ending a PFI contract is a very expensive (and difficult) business. Reneging on a PFI contract is like reneging on any private contract; the party pulling out is legally required to pay a sum for the lost earnings incurred by the other party, which – in the case of a 25-year highway maintenance contract – would possibly end up being £millions or even £billions.
And this is just cancelling the contract. There are also contractual obligations involved in making sure the contract simply continues as planned according to an established schedule. Brian Lodge – the councillor in charge of the tree felling programme – said that the council had to cut down 500 trees by the end of 2017 or they would be in breach of the Streets Ahead contact. The costs of violating the terms of the contract “could be into the millions”, and these would be “catastrophic financial consequences for the council”.
Sheffield Council do not support PFI
Interestingly enough, Sheffield Council have acknowledged that the current PFI contract isn’t exactly ideal. Julie Dore (leader of the council) has stated that the council has considered ending the contract. In fact (as quoted in that article), a Sheffield Council Labour Group stated: “We have never supported PFI, however, the Government insisted that we used this model to secure the funding to upgrade the city’s roads and pavements” (they’re not wrong: the Department for Transport is giving the council £1.2bn over the life of the contract). This is rather telling, and speaks directly to the dire circumstances faced by local authorities across the UK.
It’s pretty clear that Sheffield Council have entered into a contract that they don’t support and can’t cancel, but are legally obliged to continue with and defend at all costs (because the costs of not doing so would cripple the council). This has (partially) been acknowledged by protesters. For example, this article in the Yorkshire Post focuses on the claim that it is “money at the root of ill will” between the council and protesters. The article correctly points out that the root of the problem are PFI contracts, “derided almost universally”, but still “local authorities continue to sign them”. Sadly, the author (who is not unique in this regard) proceeds to blame Sheffield Council for these contracts and their lack of flexibility and transparency.
Shouldn’t the blame lie elsewhere?
Enter stage: Michael Gove
Even as a dispassionate observer of the Sheffield tree debacle, there was one event that seriously ticked me off: the involvement of Michael Gove. As Environment Secretary, he has made several emotive statements about Sheffield Council’s tree felling plans, accusing the council of “environmental vandalism”, and claiming that they cut down trees in ways that were “wholly unwise and wholly unacceptable”. He claims he is seeking ways to end the “bonkers” tree felling, and stated that he hoped a “decent conversation” with Sheffield City Council would help solve the dispute.
The hypocrisy of Gove here is pretty bare-faced. He was a cabinet minister for the entirety of this period and had a uniquely powerful position within the Tory political machine, and has shown absolutely no sign of being against Tory cuts to councils or against PFI in any form. In fact, he oversaw a £2bn PFI programme to build schools across the entire country in 2011, despite “mounting scepticism on both the Commons’ Treasury and public accounts committees over the way PFI has been used”.
As a politician well-versed in PFI contracts, he is also surely aware that Sheffield Council can’t simply cancel the contract after having a “decent conversation” (!!). Either Gove is shockingly ignorant about the entire situation, or he doesn’t actually care and is just trying to score political points. I know which one I believe.
A wider national trend
This actually brings me to the final issue in this entire debacle: Sheffield Council aren’t unique in cutting down their street trees. In fact, as reported by inews.co.uk: more than 150,000 trees have been removed from urban highways across the UK since 2010 at a cost of £16m – and tens of thousands have not been replaced. Elsewhere in that article, they point out that 9,200 trees have been cut down in Birmingham alone in the past seven years.
It’s not just Sheffield and Birmingham. There has been a spike in tree felling in London in recent years, with at least 20 per cent more trees cut down by the city’s 33 councils in the last five years compared with the period 2003-2007. 49,000 trees were officially recorded as being removed by council workers in the five years to the start of 2017.
What’s surprising is that this isn’t even a new phenomenon: here is an article from 2008 complaining about mass street tree felling in Bristol, and how the author was starting a group called “Bristol Street Trees” dedicated to protecting the remaining street trees.
Stop blaming local councils: blame central government instead
It’s not clear why the outrage has been the loudest in Sheffield, but what’s definitely clear is that Sheffield Council are inthe same boat as every other council in the country. They’re unable to adequately raise their own funds due to central government-set legal restrictions (and a poor populace unable to afford to pay more) and have suffered from years and years of massive funding cuts from central government. They’ve turned to PFI in order to meet their legal obligations to maintain the highways – a funding strategy approved by central government – but the contract is inflexible and too expensive to cancel, leaving them with no option but to defend and enforce the contract.
I could be wrong. Maybe there are some anti-tree sadists in Sheffield Council rubbing their hands with glee over the felling of street trees. Somehow, however, I don’t think that’s true. I think they’re as upset with this situation as everyone else. There’s just absolutely nothing they can do about it.
This entire debacle has been caused by central government policies that are crippling local councils across the country. The blame lies firmly with Westminster.