Birmingham landmarks including the NEC could be sold off

 
The NEC The NEC could be worth "as little as £300m", one finance expert has said

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Landmarks such as the NEC could be sold to pay legal claims over equal pay totalling more than £1bn, Birmingham City Council has said.

The council has agreed settlements with thousands of women who were paid less than workers - mainly men - who did equivalent jobs.

One law firm is said to be dealing with 4,000 outstanding cases.

Council leader Sir Albert Bore said no decision had been taken on any sales - but admitted it was "a possibility".

What else could Birmingham sell?

Chamberlain Square, Birmingham

Birmingham City Council could sell off some of its landmarks to settle part of a £1bn equal pay claim.

Finance professor Richard Taffler believes the NEC is "probably only worth £300m".

So what could the council sell off? Email locallive@bbc.co.uk and we'll feature your suggestions on Birmingham Local Live.

The council has already paid out nearly £500m after being allowed to borrow the money but the Department of Communities and Local Government will not allow it to borrow any more, leaving a shortfall of £550m.

A council spokesman said the authority had assets of about £5bn, and they "continually review all assets within our portfolio to ensure that the best value is obtained for the taxpayer".

Those assets include the NEC group - the National Exhibition Centre, the LG Arena, the National Indoor Arena (NIA) and the International Convention Centre.

A confidential report was circulated among councillors asking them to consider various options, BBC correspondent Phil Mackie said.

"The council remains guarded about how quickly it needs to pay the claims, and which buildings will be offered for sale," he said.

"It doesn't want to create the impression that its hand is being forced and that it's holding a fire sale."

Graphic comparing shortfall to budget

Council leader Sir Albert Bore said the NEC needed "serious investment" so the authority was "looking at the possibility of different ownership that could encourage investment in its infrastructure".

"The council does have freehold ownership of the NEC, NIA and ICC so we could give up part or all of that ownership.

"It's all in the melting pot but not decision will be made for quite a while," he added.

Sir Albert said the council would meet on Saturday to discuss its budget but councillors would not be talking about the selling of assets.

Gillian Whittaker from the GMB Union, who helped to negotiate the settlements, said: "Some of our members are very, very low paid and they should have been receiving this money over the years anyway.

"There is an opportunity to lease some of these properties so they remain within the council... If they have to sell properties then that is a decision they have to make."

'Only worth £300m'

The Labour MP for Birmingham Edgbaston, Gisela Stuart, said selling assets to pay the bill was the only available option left.

What assets do other councils hold?

Manchester City's Etihad Stadium

Manchester City Council said its largest asset was probably its 35.5% stake in Manchester Airports Group (MAG) - which owns Manchester, London Stansted, East Midlands and Bournemouth airports.

The council also leases the Etihad Stadium - which reportedly cost £119m to build - to Manchester City football club.

Bristol City Council said its highest-value asset was its council housing stock, valued at almost £836m in April 2012.

Unlike other authorities it owns 100% of its housing stock.

A spokesperson said: "We would have to put any decision to sell off the housing stock to the tenants.

"The last time we did so they voted to remain with the council as their landlord."

The City of London Corporation held about £1.3bn in assets as of March 2012.

The authority is responsible landmarks such as Tower Bridge and Smithfield Market.

It also maintains the Monument in Central London, the 202ft (62m) high column.

"If you were the leader of Birmingham City Council at this point you have inherited a legacy of a huge legal bill, you're facing financial cuts, you're facing a situation where some of your basic services can no longer be delivered because of the funding formula.

"I think with a very heavy heart you face up to the fact that you're caught between a rock and a hard place, you get the best deal to settle what was a liability that should not have occurred."

Richard Taffler, professor of finance at Warwick Business School, said the process of valuing assets such as the NEC was done by predicting the future revenue and taking away the running costs.

"But it's not as straightforward as that because then you have to discount back to the present, because owing to inflation, £1 is worth less in the future than it is now," he said.

The trouble with valuing a venue such as the NEC, he added, is the uncertainty of its future performance and the amount of investment needed to make it profitable.

"[Birmingham City] council hasn't released a financial appraisal and estimate yet, but it's likely the NEC is probably only worth £300m.

"It is not especially cash-generative."

Chris Benson, from law firm Leigh Day, represented women who are taking equal pay claims against Birmingham City Council.

He said there were a number of ways in which Birmingham could have avoided a £1bn bill.

"They could have settled with the workers they underpaid instead of paying London lawyers to defend the indefensible for two years," he said.

"They could, of course, have paid the women fairly at the time, as other councils did.

"Instead they are now left with so much to pay as they owe these women many years of wages, with interest on top."

The figures being claimed range from "the low thousands" to more than £100,000 for some full-time workers.

 

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  • rate this
    -1

    Comment number 645.

    you are told the wage when you take the job no one would take a job without finding out the rate of pay . if you later find out that another person is receiving more for the same job maybe you should have asked for parity at the interview . when I get my plumbing fixed I employ the cheapest usually I do not expect to pay them more because his predecessor got more money from me for a similar job .

  • rate this
    +28

    Comment number 552.

    Astonishing to hear that Birmingham Council thought they could get away with paying women less than men on the same grade, and then spent more council tax pointlessly fighting this tooth and nail in court. Also shocking to hear on the Today programme this morning that this might not be the only council that did this and that now might have to pay up. NB: The Equal Pay act came into law in 1970.

  • rate this
    +10

    Comment number 550.

    People really need to stop mixing up issues here.

    This case is about women who were doing exactly the same job as men and not receiving bonuses. This is illegal, quantifiable and morally wrong.

    The "gender pay gap" is a political talking point based on the fact that some professions get paid less than others. This is unquantifiable nonsense, is not illegal and is not a moral question.

  • rate this
    -5

    Comment number 474.

    Whilst I support equality in pay, the big issue with this as in many contentious rulings is the changing times. If you go back 20+ years the bread winner was the man and it was a necessity to pay him enough to feed the family. Anything the woman earned was a bonus. Times have changed for the good, but it's wrong to apply modern thinking to historic situations.

  • rate this
    +22

    Comment number 322.

    I do sympathise with the claimants but the payments will ultimately have to be met my the council taxpayers. The proposed payout is £500 per Birmingham citizen, many of whom will be worse off than the claimants already are.

 

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