Birmingham Council planning sale of former office block amid its financial turbulence
Crisis-hit Birmingham City Council is planning to sell a former office block near a high street to developers amid its financial turbulence.
Recent figures have revealed that more than 1,000 properties and plots of land have been sold off since September 2023, when the Labour-run council declared itself effectively bankrupt.
The council so far has disposed of more than £250m worth of ‘assets’, with the cash from the sales going towards the cost of equal pay – a major challenge that has plagued the council for many years.
The asset sales, which include homes, shops, car parks, plots of lands and industrial premises, are also going towards meeting previous budget deficits.
More property sales are set to be approved at a meeting next Monday, January 19, and one involves 67 Sutton New Road in Erdington – a vacant, four-storey building which was previously used for office and administrative purposes by the council.
According to a council document, the proposal is to sell the property to a developer who would convert it into residential apartments.
“The proposed transaction and generation of a capital receipt support the financial recovery plan,” a report said. “The sale removes ongoing site management costs and risk to the city council.
It also made clear that the disposal would include a restriction that prevents the building being used as a HMO in the future.
Conservative councillors Robert Alden and Gareth Moore, who represent Erdington, reacted to the proposals by saying they would have preferred for the council to retain the ‘office block’ to host staff.
“This would have been most beneficial for the vitality of the high street,” they wrote. “However, from the options brought forward by the council, we fully support the report proposal to dispose of the site.”
In particular, they welcomed the restriction that the building would not be used as a HMO in the future.
“It is vital that any residential conversion is high quality and of good room size,” they added.
Members of the relevant council committee have been recommended to approve the sale of the property ahead of next week’s meeting.
Many more asset sales expected
Government-appointed commissioners, sent in to oversee the council’s financial recovery, recently wrote in a report that the original plan was to target asset sales of £750m.
“However, due to the increased risks around equal pay this was stepped up to £1 billion last year,” they said.
“This will be an extremely stretching target which based on current evidence will be difficult to achieve.
“This emphasises the importance of managing the equal pay programme, waste dispute and associated risks to reduce the need for additional asset sales beyond the original £750m envelope.”
They went on to say that it is “conceivable” that the £750m target may be reached by late 2026 – but only if “the current focus and approach is maintained”.
They also said this would be dependent on market conditions.
“This will require significant discipline by officers and resolve by members in the run up to the May 2026 elections,” they said.
“It is imperative that members continue to support the asset sales programme.
“The alternative, of borrowing more, would have a far greater detrimental impact on services for Birmingham residents.”
A painful cocktail of issues caused the financial crisis at Birmingham Council, 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 have also partly blamed funding cuts during the previous Conservative government.
