The New Statesman’s rolling politics blog

RSS

Class action

Michael Gove needs to find some better advisers fast.

Do you believe in magic? If you give a damn about politics -- and you're reading The Staggers, so it's a fair bet that you do -- then you will probably have spent a lot of time asking, "Yes, but what does this actually mean?" Public services aren't delivered by pixies casting spells, but through a complex set of arrangements that only start in Whitehall. You wouldn't know it, but the public sector was undergoing significant change long before the banking crisis woke the politicos up to the Budget deficit.

What I will try to do here is draw the strands together and define the multidimensional chess game that is UK government. I'm going to bring together the connections between local and national politics, Whitehall civil servants, local officers and business.

It just keeps getting worse for the Education Secretary, and what started out as a little local difficulty may ultimately do for the coalition. Michael Gove started with a difficult wicket, fumbled the delivery and now has the lawyers waiting in the outfield. His error-strewn, multiple lists of cancelled school building projects mask a deeper and more complex row. And his two grovelling apologies, one to parliament and the other to councillors, weren't his first. He had to say sorry to councils after pledging to "set schools free from local authority control". Councils haven't run schools for years, but they are critical to such things as excluded kids and special needs education. Ooops.

To start, let's follow the money. The £55bn Building Schools for the Future programme was delivered by the Partnership for Schools quango to education authorities run by local councils. The aim was to build schools that are specific to local need, with long-term lifespans beyond 30 years.

The school found sponsors and contractors and cleared its bid with the education authority, which sent it on to BSF, which then sent the cash to the school. But Gove has argued that the process was cumbersome and time-consuming, and the procurement process too expensive. He has a point: Skanska spent £5m on its failed bid for contracts with Essex County Council. But bidders don't get compensation.

Labour had sent through a final pre-election tranche of school contracts, and Gove wanted to stop a fresh wave of deals from adding to costs. But he failed to see just how much chaos and anger it would cause -- even among councils on his own side. Figures from the Local Government Association showed that 67 councils have spent at least £160m doing the legally required paperwork for their now-axed bids. Sandwell Metropolitan Borough Council and Nottingham City Council have already signalled that they will mount legal challenges.

Others may follow. Kent County Council -- one of the top-performing Conservative authorities -- is also reviewing its options, as is Wigan. An early cost estimate for legal fees doing the rounds is £100m if every wronged council steps up. And that's before the parents get involved.

Although it's about schools, many of the BSF projects are hubs for regeneration projects that will lever long-term job creation into local economies. That double-dip recession is now a step closer. And the actual government exposure could be as low as £1bn, depending on how you calculate it. Gove's hope to find savings will also be scuppered by the crushing demand for more school places.

Most urban councils have experienced a significantly increased birth rate. Newham Council in east London is predicting that, for the 2012/2013 intake, it will have put in place 32 more reception classes than it had in 2007 -- an extra 3,000 places. Gove could crowbar more kids into existing schools, but that would be political suicide. Added to this, rural Conservative councils are arguing that education funding is unevenly weighted against them. Devon County Council is campaigning for a bigger slice of the pie.

And there is the political pressure on the coalition; the Lib Dems' leader in local government, Cllr Richard Kemp, has described BSF as "the straw that will break the camel's back". Even when the national media row dies down, local papers will have a field day and individual MPs will do what they always do: complain about the disgraceful spending and then lobby to save their own schools. Brass plaque fatigue will also turn grass-roots supporters against the cuts: long-serving councillors getting to hear about the scrapping of the Vera Baggins Wing, named in recognition of their years of sitting in dreary meetings, will bring howls of outrage.

Gove's decisions will hit just in time for local elections next May, and the Conservatives admit privately that they are at an electoral high-water mark. This will add to their losses. Then there are the "unknown knowns" of overspends on the projects he greenlights: the nasty surprises, such as asbestos, that the builders will find when they overhaul a 40-year-old building. Cost overruns are inevitable.

So, what options does he have? He could free up local authorities to find funding on the open money markets. They have an excellent AAA rating and all that would be needed is a small change in the law, but the Treasury isn't keen. He could tell councils that what they cash they can have, but that smashes to pieces his claims of driving localism forward. To be fair, the Education Secretary has halted a programme, which is a world away from a vow never to build another school again.

But there will be losers. And he did not communicate what the alternative would be. He will have to explain why he has decided that individual projects are unviable. That is when the lawyers will step in. Gove needs to find some better advisers, and fast, or listen more carefully to what his departmental officials tell him. When you're in a hole, stop digging.

Chris Smith is a former lobby correspondent.