Birmingham is open for business, insists Cadman

Beleaguered council chief executive Deborah Cadman has insisted that Birmingham remains open for business as the cabinet prepares to meet later today (27 February) to discuss the budget drawn up to salvage its financial position. The budget will usher in asset sales to repay the more than £1.25bn in financial support the council has received from government and an end to borrowing for capital and infrastructure projects – as well as highly controversial council tax hikes and cuts to jobs and services. Today’s cabinet meeting comes ahead of a full council meeting on 5 March, when the budget will be voted on. Birmingham City Council effectively went into administration last September when it was issued with a section 114 notice as it faced equal pay claims of up to £760m and an £80m overspend on an IT system. Shortly afterwards, Westminster announced the appointment of commissioners to help run the council. No fire sale Speaking to EG ahead of the cabinet meeting, Cadman promised there would be no “arbitrary fire sale” of council assets. “We have a very clear strategy about disposal, and what we have had to do is accelerate that strategy. I would say it has made us think differently. It has made us think creatively and it has made us think more strategically than we would have done previously,” she said. A report to cabinet from finance director Fiona Greenway confirms that property disposals will initially be drawn from the council’s commercial portfolio, development sites and strategic assets, industrial premises, retail premises and operational and miscellaneous assets located across the city. The council’s entire portfolio of property, plant and equipment is valued at approximately £7bn. Aside from meeting its best value and fiduciary duties, Cadman said asset sales must be carried out in a way that does not compromise the council’s ambitions for the city’s future development. Cash raised will be earmarked to support the potential equal pay liability and help to achieve “revenue sustainability” under the council’s recovery plan. Corporate landlord model A new cabinet property committee has been established to approve the proposed sales, with delegated powers from the cabinet to declare land and property surplus to requirements. It will have the power to determine property sales, the means of disposal and the acceptance of offers. The committee’s priority will be “to deliver the capital receipts programme without delays”. The report says the council will move to a “corporate landlord model” for managing its land and property assets to ensure a more joined-up approach throughout the council. It will also reduce the number of central administrative buildings it occupies to decrease operating costs. It will move out of Woodcock Street, Sutton New Road and New Aston House, temporarily migrating occupying services and other building users elsewhere in its estate in 2025/26 before it works out a more sustainable long-term plan. The report also makes clear that the council will no longer be able to use borrowing for capital and infrastructure projects. By 2027/28, it states that borrowing for projects outside the housing revenue account budget and the city’s enterprise zone is projected to fall from £47.3m in 2024/25 to nil in 2027/28. Maintaining confidence Aside from enterprise zone resources, delivery of regeneration and transport will need to “maximise external grant funding”, be this from government or the West Midlands Combined Authority, and the use of ring-fenced income such as proceeds from the city’s Clean Air Zone scheme. The report says the city’s “capital and infrastructure needs for the coming years cannot be delivered by the council on its own”. It adds: “Partnership working is an essential part of addressing these needs and is reflected in many of the council’s capital plans.” Cadman told EG the council had been working hard to maintain the confidence of the business community during the crisis. “The council is one part of a very, very complex jigsaw, but that doesn’t mean the jigsaw isn’t working. Quite the reverse,” she said. And, added Cadman, developers and investors are still knocking on the door. “That is gratifying, because it wouldn’t have taken much for a certain perception to have taken hold about Birmingham.”