Enterprising local government: Policy, prestige and Manchester airport, 1929-82
Identifying the impact of municipal ownership on the development of an airport involves careful consideration of the influences upon the policymaking process. The key contextual question is the compatibility between a large, multi-interest local authority, on the one hand, and the pressures of establishing and then running a complex, capital-hungry organisation operating in an intensely competitive environment, on the other. By their very nature, municipal airports are subject to considerations not normally encountered in private enterprises because of the necessarily different mode of their internal organisation. The policy makers, the elected members, may regard the pursuit of political goals to be of primary significance and this could well detract from somewhat narrower economic considerations. We argue that in the case of Manchester, despite the potential constraints on investment decisions arising from municipal ownership, the result of the process of policy making has been the promotion of the region as a centre of civil air transport based upon informed commercial judgement. The evolving development initiatives have tended towards a search for profit, rather than satisfying overtly political ends. We suggest that in Manchester municipal ownership advanced development generally and, as the scale of activity increased, structures evolved to minimise the intrusion of political considerations. A conscious policy to afford greater managerial autonomy to the airport may also be detected. Consequently, operations became insulated from the potential conflict with other priorities within the local government service; rather, they became self-supporting and distant from the municipal centre.
The obvious chronological starting point for our study is when the first civil airport was established in 1929; we terminate in 1982, when the major postwar planning phase of development was complete.1 A consideration of this period illustrates the way in which the mode of ownership affected policy formulation. Policy was geared to the attainment of specific goals within a stable, yet flexible, institutional framework which was capable of accommodating the needs of a growing and rapidly changing enterprise. In fact all the major indices of growth exhibited rapid and sustained progress after the Second World War. Aircraft movements went up from 7,682 in 1947 to 66,700 in 1982; the number of passengers rose from 33,915 to 516 million; freight increased from 149 metric tonnes to 23,660 tonnes. These impressive absolute gains were accompanied by significant relative improvements as Manchester’s share of the UK market rose on all three performance indicators.2
Our argument focuses upon three main areas. We begin, in the second section, by identifying the initiatives which underpinned airport development. Then, in the third, we consider how policy was formulated under the municipal ownership regime. This is examined in terms of the conflicting interests between the Finance and Airport Committees as losses accrued during the early phases of growth, and then with respect to the dispute between the airport and the local authority concerning the disposal of surpluses when profits did begin to materialise. The fourth section probes the political economy of ownership, control and management. We tie this down by first considering the question of how local interests were promoted by airport ownership. It is followed by tracking the evolving organisational structure and highlighting the potentially disruptive impact of the compromise of joint ownership consequent upon the reorganisation of local government in 1974.
Municipal initiative and Manchester Airport
At strategic points in the development of civil air transport in Britain, Manchester Corporation displayed a consistent policy of pursuing a prominent role for Manchester. This objective was complemented by willingness to adapt to rapid changes in aircraft design and the needs of airlines: the aim was to maximise revenue for the ratepayers. Evidence in support of this contention may be found dating back to the establishment of the airport in 1929, and proceeding through the formative years of development following the disruption due to World War II. The progressive ambitions of the local authority were manifest in an imaginative – and expensive – policy of terminal and runway construction; the promotion of an enlarged route network embracing the Continent and then the Atlantic; the laying down of secondary infrastructure, especially roads; the enhancement of income-generating activities through revenue-source diversification and accompanying prudent charging policies; and finally, a dynamic response to the challenge posed by competitor airports. Underlying the expansion of the airport was a coherent strategy clearly more influenced by commercial than by short-term political considerations.
Despite the failure of early attempts to establish scheduled air services in Britain in the 1920s, Manchester Corporation inclined to the view that there was a market for air transport in the city, given its role as a commercial and business centre. For the corporation the returns of the provincial clearing banks provided sufficient evidence of the relative prosperity of the north-west to support the new venture.’ The construction of Barton aerodrome in 1930 reflected a perceived need to provide facilities to ensure, at an early date, the introduction of scheduled air services with a direct link between the commercial and industrial community of Manchester and other large cities in the British Isles and on the Continent.’ In determining facilities for air services the corporation consulted, and acted upon, the advice of the airlines, their immediate customers. For example, in 1928 representatives of Imperial Airways were asked about the case for establishing air transport facilities. Although Imperial advised that the immediate development of internal routes was ‘out of the question’ and that Continental air services were similarly ‘very improbable’ – since they involved uneconomic distances of less than 250 miles – the corporation was encouraged by the fact that in the longer term the company envisaged the possibility of the city fulfilling a need for an intermediate station between, for example, Edinburgh and Glasgow and Croydon.5
The response to the needs of airlines and their changing fleets is a factor which has figured consistently in the development of Manchester Airport. In 1938 Corporation representatives sought to negotiate with KLM the possibility of a direct service between Manchester and Amsterdam or Rotterdam via Hull. The Chief Pilot of KLM, who landed at Barton in January, inspected the aerodrome and condemned it roundly:
Even with the maximum extensions this ground will never fulfil the conditions necessary for commercial flying … Taken from the meteorological standpoint this is the worst flying ground of any known to me in Europe … The surrounding obstructions such as high tension pylons, high factory chimneys and high radio masts make the approaches to the ground very dangerous … Our advice to the local authorities is not to spend more on this ground, but to try to find a more open ground in the neighbourhood of Manchester.6
The decision to establish Manchester’s second airport to the south of the city at Ringway in 1934 was influenced by such judgement. The subsequent development of the Ringway site likewise proceeded with the general object of providing ‘sufficient’ facilities to cater for the needs of rapidly changing aircraft design.
Following the disruptive interregnum of the Second World War, when the airport assumed an important military role, the municipality was quick to seize the initiative to extend the route network. In the early 1950s, although the need to encourage direct links with continental Europe was regarded as being of significance, efforts were directed towards placing Manchester in a favourable position to act as a transatlantic terminal. The intention was to increase the frequency of service, thereby making it more convenient to interline (change airline en route to another destination) at Manchester than at London or Prestwick. As transatlantic airports tended to be dependent for the greater part of their revenue on tourism, in order to maximise traffic steps were taken to encourage US and Canadian airlines to operate through Manchester (as most tourists preferred to travel by their national airlines or charters).’ For example, to further the policy of stimulating the choice of Ringway as a British port of call by transatlantic airlines, the town clerk corresponded with Trans-Canada Airlines of Montreal regarding the possibility of establishing a direct Canada-Manchester service.8
The encouragement of transatlantic traffic represented an attempt to establish Manchester as the second largest airport in Britain.9 In deciding in the 1950s to extend the main runway (from 5,900 ft to 7,000 ft), the airport director had supported the project in the expectation that half the transatlantic traffic at Prestwick would be attracted to Manchester and that a number of Continental and North American airlines might transfer their operations. It was also anticipated that much northern traffic could be attracted away from London.10 Another strategy of diversification was the determined effort to enter the charter market in terms of the ‘inclusive tour’ (IT) sector. By the latter 1960s more people were able to afford package tour holidays than ever before, and there was a growing demand for provincial airports to put on seasonal services to popular destinations, particularly the Mediterrean and especially Spain.11 As competition for this market grew, the provision of regional departures became a significant promotional selling point for the tour operators. Manchester set out to capture as large a share of these passenger movements as it could, and there was a huge surge in numbers passing through Ringway. In 1963, the first year in which inclusive tours were recorded as a separate item, only 91,655 people were classified under this heading. By 1970 the figure had grown to just over half a million (521,843); ten years later over 2 million passengers were on inclusive tours, or just under a quarter of the total UK market.12 This success helped to boost the substantial growth in overall passenger movements from and to Ringway over this formative period. As Table 2 shows, although occupying second place in 1961, Manchester’s passenger throughput was not in a different league from its provincial counterparts. Twenty years later, although Gatwick had moved up a rank at Manchester’s expense, the distance from the other major provincial airports had grown considerably. Ringway grew two and a half times faster than Glasgow – its closest counterpart in 1961– and handled over three times more passengers than Birmingham.The two nearest airports at Liverpool and Leeds/Bradford were a long way behind.
As a result of this growth in air movements, improving the physical infrastructure became a constant preoccupation. At a public inquiry into the proposed stopping up of roads to accommodate runway extension held in 1958, Manchester Corporation’s position was stated unequivocally:
It is the policy of the City Council, who are the owners of the airport, to develop it so that it may attract and retain direct services to all parts of the world that are justified by the commercial and industrial importance of the densely populated area served by the airport.13
Development throughout the 1960s was geared to providing facilities to cater for the jet age in general, and to accommodate the largest aircraft of the time (especially the early Boeings) which had began to operate on transatlantic services. The primary object of extending the runway further to 9,000 ft (1958-59) was to allow Ringway to take its place officially in the category of the largest airports in the world.14
The policies of the city were therefore ambitious. Nonetheless, hard commercial judgement underpinned development plans as transatlantic traffic increased the likelihood of greater revenue through diversification. As well as stimulating aeronautical revenue-earning potential, the promotion of international traffic implied the need for income generation from commercial outlets and concessions.15 For any given throughput which an airport handles, the proportion of international passengers is important because they generally spend longer in the terminal building and commercial areas, especially the duty-free facility, so commercial revenue per international passenger is much greater than the corresponding revenue from domestic passengers. With the development of terminal facilities at Ringway, and the encouragement of international traffic, the Airport Committee pursued a policy of diversification of revenue sources in order to sustain future growth. Agreeing on an overriding principle, that the financial structure had to sustain investments which appeared to be necessary for development, was important in determining aeronautical charges.16 Many local authorities in the post-war period believed that traffic would bear only a modest level of charges. Therefore the only way to attract traffic was to offer financial incentives. But the Manchester International Airport Authority, and its predecessor the Airport Committee,17 contended that if such incentives became a permanent feature of an airport’s financial structure, withdrawal at any time would cause traffic to fall off. This does not mean that Manchester rejected financial incentives but that discrimination was exercised in their application.
The municipal owners, convinced of the potential of air services from the city, adopted what may fairly be described as a ‘progressive policy towards development’. It was evident in a number of ways. First, in an era of difficulty in forecasting the requirements of new aircraft designs, the corporation demonstrated willingness to consult and act upon the advice of the airlines, responding to the needs of their new fleets. Second, an awareness of the need to compete with other airports for traffic was also apparent, but priority was given to development of facilities to attract and retain air services – rather than offering financial incentives which might, in the long term, have threatened financial stability.
Policy formulation under the municipal ownership regime
We have argued that the municipal authority promoted the development of civil air transport for the city and its hinterland, but the decision-making process involved in policy determination differed from that which might have applied under alternative ownership regimes. Local government is clearly distinct from the private sector in that the financing of services is divorced from the spending process. This ‘dualism’ means generally that spending departments are isolated from the responsibility of raising revenue to finance their activities (that being in the hands of a ‘treasury’ department). Certainly the demands placed upon financial resources by competing claims can engender a conflict of interest and disagreement between elected members over the services which are deemed suitable for local provision. In the development of Manchester’s airport conflict appeared in the arguments about the need for a local authority airport in the first place, the costs borne by the local ratepayers – especially given the heavy burden of runway and terminal development – and the local v. state ownership debate consequent upon the government’s announcement of plans to nationalise airports after 1945. Tensions were heightened in the early period when Manchester displayed the most fundamental characteristic of the small airport, that is, the absence of financial surpluses right down to the mid-1950s.
Let us first consider the principle of municipal ownership. The Ringway scheme, considered by the City Council on 25 July 1934, aroused much opposition and was approved only by the narrowest of margins: fifty-five votes to fifty-four. Whilst Alderman Sutton moved a motion recommending the acquisition of 664 acres of land at Ringway for Manchester’s second permanent municipal airport, Councillor Toole opposed the scheme because he argued that it should not be supported by the local rates. Misgivings were also expressed regarding the scope for the development of civil aviation in a country the size of Britain, and the consequences of devoting large expenditures to an industry which was undergoing rapid change. Social considerations were aired when it was suggested that ‘only the rich could afford to fly’.18 In February the following year further moves were made to quash the airport scheme during a discussion of the city’s rates. Councillor Watts proposed the deletion of an estimate of L75,000 on the basis that expenditure was ‘unjustified’ under the economic conditions of the time and he appealed to the council to consider the requirements of their public health services and to provide better accommodation for those applying for public assistance. The councillor’s amendment to delete the item was defeated by sixty votes to fortyfive and his subsequent motion that the city should not proceed was rejected by fifty-seven to thirty-five votes.19 Councillor Watts nevertheless continued his dogged opposition to Ringway and, two years later, propounded an ‘ingenious scheme’ to his colleagues. His resolution suggested that because the council thought anti-aircraft defence should be a national charge, and because the Maybury committee (1937) recommended the national co-ordination of civil aviation, the Airport Committee should be instructed to offer the whole of the property for sale to the government for use as anti-aircraft and/or civil aviation stations and/or aircraft manufacture.20 The council at large, however, considered that Watts ‘had missed the point’ – which was that Ringway had been purchased to link the city with the commercial air services of the world and ought soon to have an important bearing on the prosperity of Manchester. Alderman Titt suggested that, on the argument presented, `the Government might as well take over the gasworks’ because it would be useful to it in the event of war.21
The Finance Committee of the council thought that the city’s investment in airport facilities should be supported in the absence of any possibility of central government assuming responsibility. In respect of the proposal to establish the Barton aerodrome in 1929, the Finance Committee generally accepted that benefits could arise from Manchester’s involvement in aviation:
The proposals now under consideration show a financial burden on the City which under ordinary conditions the Finance Committee would wish to avoid, but having regard to all the circumstances, including a prospective benefit to Manchester trade generally, the Finance Committee approve the proposals of the Airport Special Committee as to the application for borrowing powers of L30,000.22
The observations of the Finance Committee regarding the Ringway scheme some five years later (in 1934) suggested much the same attitude. Despite the imposition of a financial burden on the city, the committee was ‘of the opinion that looking to the future economic development of the City satisfactory airport facilities are essential, they approve the proposals of the Airport Special Committee as to an application for borrowing powers for L179,295’.23 However, by March 1953 Ringway had cost L493,250 on capital account, the total rate-borne expenditure between 1935 and 1953 being L202,000.24 Consequently, the Finance Committee began to modify its stance, and the possibility of nationalisation seemed to offer an opportunity to abandon commitments.
The position taken by the Finance Committee (the ‘treasury department’ with responsibility) and that of the Airport Committee (the ‘spending department’) manifest the duality of local government finance. The Airport Committee remained convinced that, if the city retained control of the airport and developed it, in the long run surpluses would accrue. For the Finance Committee the assessment of alternatives hinged upon consideration of the short-term financial position. The Airport Committee maintained that the part Manchester played in the world of civil aviation was unquestionably the result of the council’s insistence that the city should not fall behind. At every stage the Airport Committee pressed for the best that civil aviation could provide and had enlisted the co-operation of the Manchester Chamber of Commerce. Its detailed knowledge of the requirements of the area, local drive, enterprise and initiative would all be required in the future if Ringway was to develop. It was argued that if Ringway were taken over by the State it would be only one of several as far as the Ministry was concerned, and in terms of development would have to take its place with others in a programme laid down from London by an authority lacking local knowledge.25
Although the Airport Committee was concerned exclusively with Ringway’s future, the Finance Committee was obviously more concerned with city-wide financial implications. For example, heavy capital expenditure on other projects was anticipated, and the level of debt charges on borrowing increasingly became a cause for concern.26 In competing for the city’s financial resources the Airport Committee was viewed as just another spender whose needs led to a spiralling burden of debt. Transfer to the State therefore offered several possible advantages. First, the city would receive a sum representing the greater part of Manchester’s capital expenditure on Ringway. The corporation would be relieved of responsibility for further capital development, against which would have to be set the relinquishing of any entitlement to future profits.27 The immediate concern was that income should rise at a rate sufficient to overtake expenditure. Although traffic had increased during the early 1950s, expenditure had grown faster than income, so that the ratepayers had to shoulder the loss. The Finance Committee felt that such losses were likely to continue, given the concentration of traffic in the summer months and the fact that the increases in traffic had, in their view, been limited to only two major routes (Ireland and the Isle of Man).
The contention that the development of a transoceanic and intercontinental airport could bring indirect benefits to the commerce of the city and region was not challenged, but the claim that municipal ownership would bring an added impetus to development was certainly questioned. One argument was that the possibility of future profits and the prestige of local authority ownership were insufficient to outweigh the added rate burden. The Finance Committee urged the council to disapprove the recommendations of the Airport Committee and instruct it to make arrangements for the transfer of the airport to the Ministry of Civil Aviation.28
At a meeting on 31 March 1953 the council considered the options regarding Ringway’s future. Clearly the decision was not going to be taken lightly, as the council adjourned on that date with no vote being registered.2 The question was considered again on 29 April 1953, and a lively and sometimes emotive debate ensued. Alderman Dawson’s (Conservative) contribution was recorded in the local press as follows: ‘If you hand over control you are admitting to the world at large that Manchester feels it is not capable of doing the job it took on in 1934 … The success of Ringway may be so glorious that in a few years you will get a profit …’30 On the other hand, Councillor Mendell (Labour) maintained that since 1945 there had been a substantial increase in income from Ringway, but even greater expenditure:
There is no indication that this trend is not going to continue. Almost every month there is a supplementary estimate for more money … Are we justified in incurring extremely high capital expenditure when all we are to get is the doubtful honour of owning an airport?31
On future ownership the Airport Committee won the day with a majority of eighty-six to thirty-two on a free vote.32 To retain ownership the city had been prepared to meet a loss of up to the product of a 2d rate, the equivalent of approximately 52,000.33
Although the question of ownership had effectively been settled in 1953, the Finance Committee continued to press the need to justify expenditure. By October 1955 estimates of the cost of a proposed new terminal building and main runway extension had risen by 162 per cent compared with the original estimates submitted in 1953.34 This wide disparity suggested that the council had come to an important decision on the basis of financial estimates that were substantially understated.35 In the face of continued escalating cost and changes in airport design, in 1957 the Airport Committee was instructed to compile a review of the economics of the administration of the airport, covering the probable ultimate capital costs and consequent maintenance costs and income.
The priority of the Airport Committee at the time was to deny, as far as possible, the entrenched view that expenditure on substantial runway extensions might, within a short period, prove to be abortive if the development of aircraft design achieved large reductions in the length of take-off required. Contemporary evidence suggested that although relevant research (on vertical take-off) was under way there was little sign of the principle being developed to such an extent as to permit its application to heavy long-distance aircraft.36 It was argued that the necessity for longer runways was not likely to be avoided for the next twenty to twenty-five years. The Airport Committee concluded that certainly over the next decade – the period when Ringway would consolidate its position as the second airport in the country – shorter runways would not be feasible. Of similar significance was the fact that the extension envisaged was necessary to attract additional services and retain existing flights operating under a weight penalty across the Atlantic. The corollary was that, if the ground facilities were not provided, services would be transferred to other airports.
The Airport Committee maintained that when the council had decided to retain Ringway it had accepted the responsibility of meeting the agreed proportion of the cost of securing air services. Although capital expenditure was considerably in excess of what had been forecast, it was stressed that in the past the council had not been too mindful of the unavoidable charge on the rate which an airport must make in the early stages of development.37 The Airport Committee’s arguments proved convincing. Those who had supported the commitment of funds to airport development were vindicated when in 1957-58 the airport accounts recorded a surplus and a sum of 12,000 was contributed to the general rate.38
As the nature of local government embraces competition with other services for resources, the very incidence of surpluses from 1957-58 could have curtailed the future development of the airport. Had narrow political objectives prevailed elected members might have employed surpluses not for its development but to reduce local rates or to subsidise other services. The evidence we have uncovered from the archive suggests that such was not the case, as new accounting practices ring-fenced airport finances. The Manchester Corporation (General Powers) Act, 1930, had already allowed the authority to establish a fund for defraying expenditure on the maintenance and renewal of works, plant appliances or items chargeable to the General Rate Fund. This provision encompassed Ringway. It certainly enabled the Airport Committee to build up sums for the renewal of plant and equipment at early stages of development,39 Up to the beginning of the 1960s the Renewals Fund adequately covered vehicles and the like, but by 1963 heavy expenditure was required for resurfacing and reconstructing aprons, aircraft standings and access roads. Given the proposals to extend the airport at that time, and the expected growth in traffic, the Renewal Fund cover was expanded to embrace works as well as plant and equipment, and an initial contribution of L30,000 was made to the Runway Renewal Fund in the year ending 31 March 1963.40
As Ringway grew, further measures secured funds for future development. Section 30 of the Manchester Corporation Act, 1965, extended the definition of ‘trading undertakings’ to include the airport. Before 1965 any revenue surplus (or deficiency) on the airport accounts was automatically credited to (or charged against) the Rate Fund. Under such constraints, the consolidation of airport finances was achieved through a general policy of applying operating surpluses to supplementary debt redemption. This ensured that, indirectly, surpluses generated by the airport were used to support the enterprise.41 Its status as a ‘trading undertaking’ meant that the council could exercise the right to use the profits of the airport for the benefit of the rate, but had no obligation to do so; it also retained the right to set profits aside to establish the airport on a self-supporting basis. As the airport was a ‘trading undertaking’ the council had to prescribe the maximum amount to be accumulated in the airport’s newly established Reserve Fund. On 31 March 1965 capital outlay stood at L5,761,324 but was expected to increase substantially with the anticipated heavy programme of capital expenditure. It was thus agreed that an arbitrary 10 per cent of capital outlay at any one time was appropriate to the reserve. A sum of L293,264 standing to the credit of the Airport Committee in the General Rate Fund Renewals Fund was therefore immediately transferred to the Reserve Fund of the airport.42
In Manchester, as elsewhere, local government finance became restricted by central government in the mid-1960s. Therefore the Finance Committee, in seeking to relieve the financial pressure on the authority, insisted on a contribution of L108,000 (equivalent to the product of a id rate) to the general rate in 1966-67.43 Contributions to Renewal Funds were reduced for a short time, although the contribution to the reserve remained quite healthy. Surprisingly, then, the demands of the Finance Committee had not significantly undermined the financial security of the airport. Nonetheless, evasive action was taken to ensure that the needs of a capital investment programme to cater for a new range of aircraft coming into service should take precedence over other financial considerations. The maximum reserve for the airport was doubled to 20 per cent of capital outlay.
When a period of large disposable surpluses opened in the 1970s the institution of a budgeted rate of return was regarded as offering the facility to plan for the creation of Renewals and Reserve Funds ‘free from political intervention’.44 Nonetheless a flexible approach was maintained. In times of difficulty airport management could rely upon their owners to reject a policy of short-term gain in favour of long-term growth and financial stability. The impact of the first oil crisis, which raised the costs of airline operators, illustrates the point well. In 1974-75 investment in runway renewal, transport and heavy plant collapsed, and for the first time since 1956-57 there was a sharp deficit, so that substantial funds had to be removed from the General Reserve.45 Over the next three years the local authority owners took no ‘dividend’ (rate) but rather focused upon rebuilding the reserve. Conflicting priorities did not re-emerge until the introduction of the Planning and Land Act of 1980, which restricted the level of capital expenditure at local authority airports through capital allocations for `projects of national or regional importance’.46 Capital expenditure had to be more closely monitored to ensure that cash limits were not breached, and the restriction of borrowing powers meant that revenue contributions to capital outlay had to be increased.47 Whilst the Manchester International Airport Authority (MIAA) had to contend with the limitations of its financial freedom imposed by central government, the same applied to the two parent authorities (the council and Greater Manchester County). In 1980/81 and 1981/82 the parent authorities, under the impact of cash limits, began to press for distribution in excess of an agreed 5 per cent of capital outlay. As a result, L3.8 million and L5 million were distributed. Whilst in the second half of the 1970s priority had been given to building up the airport’s general reserve in 1980/81 and 1981/82 no contributions whatsoever were made to the reserve.
As surpluses began to accrue to airport operations no doubt a larger distribution of profits could have been achieved by the elected members, but with profitability came greater autonomy and the designation of the airport as a trading undertaking. During the period preceding the institution of cash limits in 1980, funds were made available for the future development of Ringway. Surpluses tended to be ploughed back, whilst relatively small distributions eased the overall rate burden when local authority finance was constrained. Indeed, in the recession of the 1970s, when the airport’s profitability was threatened, priority was given to the recovery of reserves, again reflecting a long-term view. In this respect, it seems clear that despite the pressures of central government control of the distribution (and of course the level) of local authority capital funding, the council and later the Airport Authority tended to operate much like any commercial concern.
The political economy of ownership, control and management
It has been argued that local government in the post-war period became increasingly characterised by the conflict between narrow operational efficiency and the political needs of an elected assembly.48 Counsellors continually sought to resist the concentration of power either of central government or of single-purpose authorities. Such resistance spread the democratic process more widely and supported local interests. As far as Ringway is concerned, we suggest that there is evidence to support the case that airport development was influenced by considerations of municipal prestige and the promotion of local interests. However, solutions designed to contain the power of the ‘heavyhanded’ State did not always contribute to improved managerial efficacy.
At the outset the establishment of a temporary aerodrome at Wythenshawe, while awaiting completion of the Barton site, most certainly reflected considerations of municipal prestige. As Barton was undergoing construction it became apparent that Hull was likely to have a suitable site at Hedon in operation before Manchester – although the decision to promote civil air transport in Hull had been taken after Manchester. It was only in September 1928 that the Hull Chamber of Commerce had appointed a special committee ‘to advance a proposal for the establishment of an air service for the transport of mail between England and the Continent, with Hull as a forwarding point’.49 The Manchester Corporation, therefore, improvised a temporary site at Wythenshawe in order to become the first local authority in the country to establish a municipal aerodrome; it was licensed on 22 April 1929.50
A second example concerns the debate regarding the future ownership of the airport consequent upon the reorganisation of local government under the Local Government Act, 1972. This provides evidence that municipal pride was a key factor, although the case also demonstrates the priority given by local authorities to resisting the extension of central government power to the detriment of local interests. Local government reorganisation in 1974 resulted in the first major change of ownership structures in the history of Manchester’s airports. At the time, powers to own and operate airports were exercisable by county borough councils and concurrently by county and by county district councils. Of thirty local authority airports in the country, twenty were operated by single local authorities, as in the case of Manchester, and consortia of local authorities operated the remaining ten. The Local Government Act, 1972, created a new county council for Manchester stretching from Rochdale in the north to Wilmslow in the south, and from Wigan in the west to Oldham in the east. The counties of Lancashire and Cheshire were to lose all powers and control in the new administrative area, and county boroughs such as Manchester were to cease to exist. The new county created was to comprise ten districts, with the new authority representatives being elected in April and May 1973. The new Greater Manchester County Council was to have 107 councillors, with the Manchester District electing twenty representatives. The new Manchester District was to cover the old Manchester County Borough and to incorporate the parish of Ringway in the rural district of Bucklow.51 Although the general rules for the transfer of property suggested that the ownership of Ringway would remain with the Manchester District, the Secretary of State took reserve powers to make supplementary orders to amend this general principle.52 Three possible courses of action could be taken: first, the airport could remain with the District; second, the airport could be vested in the Greater Manchester County Council by supplemental order; third, the Secretary of State could exercise an option to acquire the airport. Basically, it was held that re-organisation offered the opportunity for the local reappraisal of responsibility for each local authority airport to ensure that the full benefit would be obtained from the new structure of local government.
With the prospect of local government reorganisation in the early 1970s, the Airport Director at Manchester supported the transfer of responsibility to the new Greater Manchester County. His view was not shared by the elected representatives of the Manchester District authority, and a fundamental difference of opinion emerged between the existing airport owners and the newly created GMC which was resolved only by a compromise prompted by the prospect of central government intervention. The newly created authority assumed a significant role in the promotion of industry, commerce and employment in the whole of the Greater Manchester area. The County Council maintained that in order to fulfil its role in the development of the area’s economy, ownership and control of the airport were essential. It was argued that the new authority would be conscious of development needs across a wider spectrum and therefore be more favourably situated to determine the potential for future growth. For example, the social costs of airport development had registered beyond the city boundary and therefore the Greater Manchester Council felt that it should hold responsibility for any remedial work and compensation. The GMC represented the wider constituency of airport users and therefore was better equipped to shoulder the financial burden of airport development. As it was the traffic and transport authority, it seemed logical that the responsibility for airport development should lie with the body which determined surface modes of transport.53
The Manchester District Labour Party also favoured control by the new County Council but the majority of elected representatives on the District Council were adamant that they should retain control of the airport.54 The chairman of the Airport Committee maintained that the development of Ringway had been one of the most striking examples of local government enthusiasm and enterprise, and that the acquisition of international status since the Second World War was a result of the determination of the city and the support of its ratepayers. Like the County, the District Council was anxious to maintain the international status of the airport and improve facilities like its predecessor, the City Council.55 Considerable prestige also derived from ownership of an airport, which, over a fifteen-year period, had contributed L1,789,404 to the rate despite the need for heavy capital expenditure.
At an Airport Committee meeting on 13 September 1973, a resolution was passed unanimously:
That the Department of the Environment be informed that the Manchester District Council hold the strong view that the ownership and responsibility for the control, management, operation and development of the existing Manchester Airport should vest in the Manchester District Council.56
The views of the new District Authority and the new County regarding the future ownership of Ringway were diametrically opposed. The District Council maintained that the city had developed the airport well enough in the past and, since Manchester ratepayers had financed it, the airport should remain with them for their benefit. For its part the GMC held that, since the airport served the region, the benefits it brought to the community and the environmental disadvantages for those living near by should be shared by people residing in the new larger metropolitan area. The two local authorities were in agreement on one fundamental principle: the airport should remain under local government control and any proposal that the British Airports Authority should resume responsibility should be resisted.57 Avoiding intervention by the Secretary of State was paramount, and a compromise of joint ownership was reached, with the Manchester District and the Greater Manchester County Councils appointing a committee known initially as the Manchester Airport Joint Committee (later the Manchester International Airport Authority) to discharge all airport functions. The Joint Committee was to have equal representation with ten members appointed by the Manchester District and ten by the County.58
Evolving organisational structures and joint ownership
In common with many other types of enterprise, as the scale of airport operations increased so too did their complexity. Organisational structures evolved on the basis of existing structures and the pressures for change. At Ringway the process of development led to greater specialisation in airport operations. This initially involved the extension of the Airport Department. Under City Council ownership the transition was gradual and relatively fluid, but the institution of joint ownership introduced difficulties in the coordination of functions. This in turn accelerated a process towards greater autonomy, so distancing the airport from its municipal custodians.
From 31 April 1938 the corporation managed Manchester’s airports directly and a separate Airport Department was established. By October 1939 a total of nine corporation staff were employed at Barton (a deputy manager, general assistant, junior, groundsman/foreman, three groundsmen and two nightwatchmen, one permanent and the other temporary). The Ringway site constituted the management and administrative centre of the department, and assisting the Airport Manager were a senior administrative assistant, a general assistant, a junior, two shorthand typists, a telephone operator, a maintenance engineer, six labourers and one nightwatchman.59
With the establishment of this department, it had been agreed with the town clerk, the Airport Manager would undertake all administrative work except that conducted by the town clerk. The clerk maintained the link between airport management and elected members.60 The transfer of responsibilities from other functional departments of the Town Hall tended to be relatively limited throughout the early period of growth and development, and the department received considerable professional support from elsewhere. For example, the City Treasurer’s Department was responsible for the payment of accounts and processed all concessionary payments. The treasury also issued invoices for rental charges on property owned by the corporation. Any applications received for tenancies and accommodation at the airport, if approved by committee, were passed to the City Estates Officer to negotiate terms and conditions.61 Throughout the period of runway and terminal development in the 1950s and 1960s the City Architect discharged the design function in respect of buildings and supervised the work of private consultant architects.62 Similarly the City Engineer and Surveyor’s Department had been heavily involved in the design of five runway extension schemes (including ancillary works and the construction of roads) to the new terminal building, often supervising the work of contractors. By the early 1970s a section of this department was virtually devoted to airport work whilst the professional advice and guidance of the City Engineer, his deputy and top echelon officers were provided on a part-time basis.63 When the Town Hall committee proposed the appointment of an Information and Publicity Officer to develop the existing information services and introduce a publicity service in 1963 it was assumed that this officer would absorb responsibility for publicity and information regarding Manchester Airport.64
By the late 1950s the Airport Department had grown substantially, with an Airport Director and assistant heading relatively large sections discharging administrative, accounting, maintenance, fire and police functions. The activities of airport-based personnel were satisfactorily co-ordinated with the support services provided by the other functional departments of the corporation. There was a trend towards greater autonomy within the Airport Department. For example, in the early 1960s the department called for a dedicated Press and Public Relations Officer, and with the need to implement major passenger terminal extension schemes the airport management also pressed the case for establishing a separate development section based permanently at Ringway.65 The extension of facilities proposed in the late 1960s involved much critical planning to forward the building programme and, at the same time, ensure that the operation of the airport was maintained with the minimum of disturbance. In addition, the urgency of carrying out the passenger terminal project dictated an extremely tight phasing programme necessitating complicated functional planning work. As a result of these requirements it was resolved that a development section should be established to assume responsibility for the planning and implementation of all capital building development (from 1969).66 In addition to establishing new specialists, by the 1970s the department had significantly expanded its senior management structure to include five assistant directors responsible for personnel and general administration, development, operations, engineering and finance.67
With the institution of joint ownership, the question arose as to how the provision of support services should be divided between the two authorities. In principle it was agreed that the Manchester Airport Joint Committee should be serviced by a joint secretariat with the chief officers of both City and County able to submit reports (either jointly or separately) on matters affecting the airport. Thus the advisory role regarding future policy was seen as a joint responsibility. Support services were generally divided between each authority. The County was to carry the responsibility for routine finance, including the insurance of airport assets, the payment of staff and the raising of capital. The County also discharged the personnel function. Although airport staff were ostensibly under the direct control of the Joint Committee for payroll purposes, they were nominally on the establishment of the County Council. The City Council administration provided support in the secretarial, legal, architectural design, building maintenance and construction, and valuation spheres.68
Early organisational difficulties emerged in the provision of engineering services, the only support service to be maintained by the two authorities concurrently. The County and City Engineers had concluded jointly that it would be appropriate to split the function, with the County Engineer controlling activities, assuming responsibility for major projects allocated by the Joint Committee such as a possible second runway. In discharging this function the County Engineer was to organise the service on the basis of a joint design unit with specialist staff being seconded from both the City and County Engineers’ offices. The City Engineer was to assume responsibility for all remaining minor civil engineering functions.69 Whilst it would appear that care was taken to demarcate the bounds of activity between the two officers, within two years such lines of demarcation became a source of friction. The Senior Assistant Airport Director noted that before reorganisation, when all the civil engineering work had been carried out by the City Engineer, the system had worked ‘very satisfactorily’. Work had been completed on time, specifications had been correct and the whole operation had ‘run very smoothly’. It was claimed that since reorganisation difficulties had emerged from lack of continuity and differences of professional opinion that led to unnecessary meetings and added expense.70
By the late 1970s the problem of the roles of the Joint Engineers had still not been resolved and it was becoming increasingly difficult to demarcate the roles of senior airport management and the authorities’ chief officers. As early as 1974 responsibility for the processing of concessionary payments had passed from the City Treasurer to the Income sub-section of the airport, and in the late 1970s the issue of invoices in respect of rental charges on property owned by the Airport Authority had also been transferred. However, senior management at the airport registered dissatisfaction with the arrangement whereby the County Treasurer remained primarily responsible for the collection of income through invoices raised by the Finance Division of the airport. The need for two Joint Treasurers to be involved in the provision of financial services was also questioned, as it was felt that all routine accountancy should be carried out at the airport.71 Similarly the distinction between the roles of the Assistant Airport Director (Personnel) and the County Personnel Officer had become blurred. Although the former post had been newly created to deal with all personnel and industrial relations matters affecting airport employees, the County Personnel Officer claimed responsibility for all such matters at Ringway. It was further claimed that some departments did not always meet the airport priorities, thereby creating delays. Moreover County and City professionals assumed responsibility for project management without consulting airport managers, who were accused of inefficiency.72
In the light of these difficulties a fundamental restructuring was recommended. Greater responsibility was placed with senior airport management and a new organisational structure put in place. Whilst the City Engineer continued to provide a civil engineering maintenance service, the City Engineer and the County Engineer were to discharge their functions as contractors and, where necessary, consultants on major civil engineering work, operating under a strengthened airport-based combined operations and engineering function. Similarly the City Architect and the City Estates and Valuation Officer had their lines of responsibility demarcated. The County Treasurer retained responsibility for budgetary and strategic financial policies, for borrowing and for audit purposes, consulting the City Treasurer on policy matters. Whilst the County Treasurer, therefore, continued to be an independent financial adviser to the Airport Authority, neither the County chief officer nor the City chief officer was to be involved in the detailed financial issues relating to the airport. As for the personnel function, it was recommended that the senior personnel officer at the airport should advise the Airport Director on personnel issues, with back-up from the County Personnel Officer. However, emphasis was laid on the contention that the County Personnel Officer should advise and support the Airport Director and his staff and not provide independent advice to elected members in committees involved with industrial relations or operate separately from airport management. These proposals involved a crucial point of principle that airport management and not the Airport Authority should be allowed to manage all the important aspects of the operations at Ringway.
Municipal ownership introduced a number of factors to the internal decisionmaking processes regarding investment which could have constrained airport development. These included competition between services for the funds and resources of the local authority, the division of responsibility between the policy ‘spending’ and the ‘treasury’ committees, and finally the intrusion of political objectives which might have had little to do with the operation of a commercial concern. Local government control of Ringway could well have had adverse effects on the economic needs of the airport. Despite such dangers, we have argued, Manchester City Council consistently pursued commercial objectives and profit rather than any broader political objectives. The provision of facilities to cater for the largest contemporary aircraft demonstrates a rather unusual degree of municipal enterprise and willingness to acept risk in pursuit of a lucrative market. Awareness of the need to compete with other airports has been evident in imaginative pricing policies, and although the distribution of profits has been a point of contention, the principle of ploughing them back has prevailed except at times of overwhelming financial pressure. In response to local government reorganisation, the desire to keep the airport in municipal hands undoubtedly took precedence over considerations of operational efficiency. The promotion of local democracy and resistance to the ambitions of an interventionist State could have been disruptive but joint ownership accelerated an earlier trend to ‘arm’s length’ administration. Another potential constraint was the early opposition of elected members to investment in airport facilities and the subsequent misgivings of the Finance Committee about the burden on the rates of an essentially risky business. Yet the outcome of the debate was favourable to the airport. When considerations of municipal prestige were so compelling it was no mean achievement.
Copyright Manchester University Press Sep 2001
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