By Professor John Clancy and Professor David Bailey

In October last year the financially-challenged Max Caller (Limited) did some sums.

Faced with understandable condemnation from the users and their families of four day centres for the disabled, which the council was effectively under government orders to close to save money, Gove-appointed hangover Chief Commisioner Max 'the axe' Caller's abacus clicked away and he told us that any delay in their closures would cost £100,000 a month.

That meant he was ordering the council to proceed without even democratic scrutiny, which fetched him more condemnation.

The four closures would save £1.95 million over the year.

He went on to say:

" Every month this goes on is costing £100,000. That money is someone else's service - it's not a free choice."

It's a pretty standard Tory tactic to attempt to divide and rule: distract attention by trying to pit one deprived person against another deprived person. In this case, using Tory talk, one 'service user' against another. Max Caller Limited is very good at Tory talk.

There is actually a free choice - though not in the sense of the words Max Caller Limited was using.

Birmingham City Council has chosen to cut spending on services, but 'freely chooses' (and it is a choice) to increase spending dramatically on investment management expenses for its already mega-wealthy pension fund managers at the same time.

So, since April 1st 2024 Birmingham City Council has paid out £26 million in investment management expenses to those who manage the investments of the Birmingham share of the West Midlands pension fund.

By March 31st 2025 the council will have paid at least £34 million to them in expenses over the financial year. That's £2.8 million every month.

It will increase in less than three months time to £35.5 million a year, or £3 million a month.

But, as Max Caller Limited tells us, the four closing day centres are costing us as much as £100,000 a month!

That's 3% of the investment managers' expenses.

Including the Birmingham Children's Trust and Acivico, Birmingham City Council has a 30% share of the West Midlands Pension Fund; and 30% share of its investment management expenses.

On the basis of last year, the West Midlands Pension Fund will pay at least £110 million in expenses to its investment managers this year. It's likely to have been more, as they underestimated the annual figure last March 2024 by £2.8 million.

The WMPF has the investment management expenses going up each year by £4.4 million in its future estimates (which will probably turn out to be underestimates).

So Birmingham should get ready to pay an extra £1.3 million in their share of investment management expenses - each and every year 'going forward', as they say.

Birmingham will be handing over £40 million a year in expenses in three years time.

That's £3.3 million each month to the investment managers. Kerching!

Every cabinet report where decisions are made to cut services requires a statement as to the consideration of alternatives.

Was there at any stage in any of the cabinet reports approving the cutting of services in the last year the consideration of cutting the investment management expenses for the pension fund, instead?

Leeds City Council, whose pension fund investment managers significantly outperform Birmingham's, paid them just £1.9 million for the entire year, for pretty much the same sized fund. That's the cost of running the four disabled persons' day centres in Birmingham. Spooky, that.

So Leeds pays £153,000 a month in investment management expenses for its share of the West Yorkshire Pension Fund. In the West Midlands, Birmingham pays £2.8 million a month.

Leeds is unlikely to pay much more than £2 million in investment management expenses next year from April the 1st, for the entire year; we know Birmingham will likely pay £35.5 million.

Over the last 10 years Birmingham has shelled out over £0.25 Billion in investment management expenses, £263million to be more precise . Leeds has paid out just £12.5 million.

Canny, those Yorkshire folk.

How financially illiterate do you need to be, Max Caller Limited, not to get this?

Uncanny, Maxwell. Uncanny.

Updated to reflect WMPF's miscalculation leading to an underestimate of the management expenses 2023-24, meaning a higher starting point for the expenses in 2024-25.