£500m of council assets to be sold to plug budget hole

Max Caller, lead commissioner of Birmingham City Council has revealed the council will have to identify and sell £500m worth of assets in the next twelve months. 

Commissioners have agreed to a programme to regear the council’s £2.4bn investment property portfolio to propose the sales of property and assets.

The council holds the largest land estate of any UK local authority, extending to 26,000 acres and attracts on average £34m of revenue per year from more than 6,500 property assets and over 300 of these have historic interest.

Assets include the Central Library, Birmingham Museum and Art Gallery, Aston Hall and Sarehole Mill, thought to be the inspiration for a mill in Tolkein’s Lord of the Rings. The council’s stake in Birmingham Airport could also be sold off.

Speaking to BBC Politics Midlands, Caller said Birmingham residents are likely to experience at least a 10% rise in council tax which is “par for the course” at effectively bankrupt councils. 

He said: “Most (councils issuing 114 notices) were allowed to increase council tax by around 10%, apart from Croydon that increased it by 15%. But it requires a formal request and support from commissioners.

“An extra 5% on council tax in Birmingham will raise around £20m.”

Council leader John Cotton announced last week that he will write to the government to secure permission to hike council tax rates by more than the limit of 4.99% without holding a referendum. 

The move follows the beginning of a ballot for strike action, with more than 3,000 staff set to vote following the council’s “delay” in settling its £760m equal pay liability.

The council effectively declared itself bankrupt following the liability, an £80m IT overspend and a series of budget cuts.

Its first projections of where it will save £149.8m were also released last week, with children and family services being the worst hit with £57m set to be cut, followed by city operations including highways and infrastructure management with £29m.

Birmingham City Council has been set the task by commissioners to identify £300m of savings by January 7. 

The council’s own operations and management will be slashed by £15.6m – almost 50% of its budget. 

30% of the budget for city housing and homelessness is expected to be saved as well as almost £22m from adult and social care.  

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