But in a city where a 'go-ahead' Labour council was meant to have tackled economic decline by producing a 'breathtaking civic renaissance' - complete with a new convention centre, sports arena, tourism office, orchestra hall, ballet company and opera company - the fact that thousands of citizens were facing eviction because of industrial action in a council benefits office was, to say the least, an image problem.
What is clear is that the council's harassed welfare staff did not give a damn for Birmingham's leaders' desire to project the city as a prosperous European metropolis.
Some had decided to refuse to deal with anyone forced to join the 37 per cent of the city's population already receiving state benefits when six of their colleagues went home covered in stress-induced rashes.
Others blamed the closure on an explosion of tension: a few days after the scabies outbreak, a man picked up a woman he alleged had stolen his place in the benefit queue and sent her crashing through the supposedly unbreakable screen protecting officials from violent clients.
Paul Quigley, the council workers' shop steward, said he did not know what had been the final straw, but he was certain that the city's refusal to fund basic services lay at the bottom of the work-to-rule.
'We were just stalling people . . . stringing them along, because we did not have the bodies to deal with their claims for five months,' he said.
The misery in Britain's second city does not end in the housing benefit office. In the nine inner-Birmingham wards, 31 per cent of adults are out of work. Inner Birmingham has more unemployed than the whole of Bradford and almost as many as Sheffield.
The city's schools, says Valerie Evans, formerly one of HM Inspectors, are in 'an absolutely shocking state'. Regularly near the bottom of government league tables, they need pounds 200m spent on repairs and modernisation. Just 23 per cent of pupils achieve five or more GCSEs at grade C and above - equivalent to the old O-levels.
Scabies in offices, mass unemployment, an education system literally crumbling - these are hardly the images that Birmingham has been propagating for the past 10 years.
According to the publicity the city has been putting out, Birmingham has 'pulled itself upwards' since the loss of 140,000 manufacturing jobs in the early Eighties.
'The right message,' said Vincent Hanna, the television journalist, who was given pounds 1,200 a day for 50 days last year to advise on the city's image, 'is that Birmingham is ready. Ready to compete with Frankfurt, Lyons and Barcelona'.
Birmingham has tried to compete. Since 1984, when Labour took control of the most powerful council in England, the city has bid for the Olympics and lost, and staged a Super Prix road race, which had to be abandoned. Undaunted, the council began a massive public-works programme. Prestige venues, aimed at turning Birmingham into a tourist, conference and sporting centre, filled the city centre.
There was the pounds 180m glass-and-stone International Convention Centre, designed to attract conferences from around the world, complete with a new hall for Simon Rattle's City of Birmingham Symphony Orchestra. Next to it, the pounds 57m National Indoor Arena was built with the intention that Birmingham would become a world capital for sport and entertainment.
The city centre was transformed. Grimy Victorian buildings were sandblasted. Sadler's Wells Royal Ballet and the D'Oyly Carte Opera were wooed and took up residence. Cars were barred from the square outside the council house and in their place a gigantic bronze naked woman was put at the top of a stepped fountain which flowed down to a pool 50ft below. The nude, meant to represent the fount of life, was inevitably nicknamed 'the Floozie in the Jacuzzi'.
But even sneering critics from the South were forced to agree that, for the first time in living memory, Birmingham looked impressive, even, perhaps, beautiful.
The right-wing Labour leaders, with the support of the opposition Conservatives, threw themselves enthusiastically into partnership with private enterprise.
The city did not have a five-star hotel, so the council allied itself with the Hyatt group and built a luxury blue-glass tower block, next to the convention centre. Sir Dick Knowles, the Labour leader, went on to the hotel's board.
There was a consensus between businessmen and Labour and Conservative politicians on what needed to be done. Manchester, with its Olympic bid, and Sheffield, with its decision to hold the World Student Games, followed Birmingham's example and also attempted to regenerate their cities with high-profile, prestige events. Their rush to imitate appeared to vindicate Sir Dick's belief that provincial cities could no longer just be manufacturing centres 'where people come to work and then leave as quickly as possible'.
Last week that cosy consensus collapsed. In a political sea-change, little noticed outside the city but which could have profound consequences for the future direction of municipal socialism in England, Theresa Stewart, a 63-year-old grandmother, who is invariably described as a veteran left-winger, succeeded Sir Dick as leader of the Labour group and thus of the city council.
He had purged her and other left-wingers from key committee posts in 1987. But with the right-wing vote split between two candidates, even the strong opposition of Sir Dick, who retired this month, could do nothing to stop Mrs Stewart's advance.
Mrs Stewart makes an unlikely left-wing demon. She is warm, intelligent, energetic and immensely popular - prayers were said for her victory in black churches in Handsworth - and her socialism consists of a belief that the council should spend its money on education, housing and social services.
But in Birmingham, and possibly in Manchester and Sheffield too, this back-to-basics approach is the most revolutionary challenge the ruling elite can imagine.
Mrs Stewart nailed her colours to the mast a few days before Labour councillors went to vote. The local paper asked her if she would support another Birmingham Olympic bid now that Manchester had lost. 'I wouldn't spend pounds 10 on the Olympics,' she replied tartly.
Now she is in power, she pours scorn on the idea that high-class projects could revive the city. 'My Labour colleagues have been telling me for 10 years that this is municipal socialism - it's municipal stupidity more like. Yes, the city centre is now ravishing, and yes, the convention centre has created jobs. But such jobs - part-time, low-pay, short-term, non-union jobs.
'I want to draw a line. To stop throwing good money after bad. There are people here who would keep spending money on the city centre forever.
'What's the point of another Olympic bid . . . of entering a competition to see which city can give the biggest bribes to the Olympic delegates?'
Mrs Stewart's first act was to divert pounds 5m from council coffers to begin dealing with the backlog of school repairs. More 'commonsense' returns to funding ordinary services are promised.
Five years ago, any councillor attacking Birmingham's grand projects would have been committing political suicide. Even last year, when Patrick Loftman and Brendan Nevin, two lecturers at the University of Central England (formerly Birmingham Polytechnic), published a dry research paper arguing that the city's 'prestige model' of regeneration had failed, there was an outcry.
Council leaders threatened to question the authors' academic credentials with university managers and the local press made the report - which would have been ignored in most other cities - front-page news.
Now the climate has changed. First, there is a widespread recognition that the council had been diverting funds from basic services to pay for the convention, sports and tourism centres. Last year, voters in the West Midlands were treated to the bizarre spectacle of John Patten, a Conservative Secretary of State for Education, accusing a Labour council of underspending on schools. It had 'kidnapped' pounds 55m of central funds earmarked for schools and spent the money elsewhere, he claimed. Mrs Stewart believes him.
Second, as the unemployment figures show, almost 10 years of high-cost, high-profile projects have failed to boost the city's economy.
Even on their own terms, the headline-grabbing plans have been a failure. As Mrs Stewart's supporters rose up the Labour hierarchy they discovered and revealed that the convention centre had an operating loss of pounds 6m a year as well as costing the council pounds 20m a year in debt-repayment charges.
Andrew Coulson, the councillor in charge of monitoring the centre, symphony hall and indoor arena, confessed: 'It's nigh on impossible to break even. I wish it were not true, but I can't see how it can be done.'
Mrs Stewart has warned the centre's managers that now they must pay for their keep.
Patrick Loftman - who survived the attempts to have his academic career ruined - said that he suspected Mrs Stewart's election was more than a local event. Birmingham, Manchester and Sheffield had all followed the example of US cities such as Baltimore which believed that money generated from luxurious developments in the city centre would 'trickle down' into the inner cities.
'In every US city where this policy has been tried it has failed,' he said. 'In each case, reforming administrations have now come to power promising to concentrate on basic services. Theresa Stewart's election is the first sign that this trend is now hitting Britain.'
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