Government-appointed commissioners have stated that Birmingham City Council's finances are 'much improved', but around £370m worth of asset sales are still required. Hundreds of properties and plots of land have been sold since September 2023, when the council declared itself effectively bankrupt.
During the fallout, residents faced unprecedented cuts to local services and council tax hikes. The council embarked on a major asset sale programme to overcome financial woes, disposing of shops, industrial and business premises, garages, car parks, a former pub, and plots of land.
Notable Asset Sales
The most notable sale was the Bordesley Green 'Wheels' site, sold for £50m, set to become the home of Birmingham City FC's new stadium in the planned Sports Quarter development. Other smaller assets include a former children's centre in Quinton Road West.
Commissioners acknowledged positive steps under the previous Labour administration, which said the council was no longer 'bankrupt' earlier this year. However, they warned that 'significant risks' remain for the new minority coalition administration involving Liberal Democrats, Greens, and independents.
Commissioner's Update
Tony McArdle, lead commissioner, said in a recent update: "The council set a balanced budget for 2026/27, for the first time in three years. This is a significant milestone and demonstrates positive progress. The requirement for Exceptional Financial Support has also reduced but remains significant at £1 billion."
He added: "The financial position of the council is much improved, in large part reflecting a significant increase in resources as a result of the Fair Funding review."
Challenges Ahead
McArdle noted: "The savings requirement is £95m for 2026/27 and risks of non-delivery remain material. The council must learn the lessons from 2025/26, where savings delivery has been poor in some areas and ensure the appropriate discipline and pace is in place."
He continued: "Transformation of services needs to be developed and should underpin the next Medium Term Financial Plan, driving savings delivery and service improvement over the next four years."
Asset Disposal Progress
McArdle said the council had made "steady progress" with asset disposals: "But it now seems likely the programme will not be fully delivered until at least the end of 2028. In the absence of any risks materialising, asset sales disposal of c£750m will be required to fund historical budget deficits and equal pay. The council has to date achieved sales of £380m."
He warned: "The council must remain focused on meeting this target as the alternative of borrowing will impact on its financial prospects."
Political Reaction
Conservative group leader Cllr Robert Alden said: "We've seen community assets sold – playing fields, community centres. These are the sort of things that need to be saved for our local residents, to be able to benefit from. That's why they were left to the city often, to actually be used for that purpose."
Alden added: "The other impact is the lost opportunity down the line. Some of the assets being sold, [such as] industrial units, could have been sold anyway and that money put into an endowment trust that could have invested in the future of Birmingham."
Financial Turmoil Causes
The financial turmoil stemmed from issues including the equal pay debacle, inadequate budget setting, poor service management, demand-led pressures, and the disastrous implementation of a new IT system. Labour councillors pointed to funding cuts during the Tories' time in government.
Optimism for Future
Lead commissioner McArdle offered optimism: "As a result of the government's Fair Funding settlement for the next three years, the council has headroom to invest in services. The council must base capital and revenue investment decisions on robust performance information on service quality and cost as well as council priorities. Investment must drive measurable quality and efficiency improvement in services."
He concluded: "The improved budget position is a great opportunity to improve services for Birmingham residents and one that must not be missed. The finance function continues to modernise and senior leadership is setting a positive culture and new working practices."
