Athletes' village sale to cost council £320m - report
BBCHundreds of homes built for the Commonwealth Games in Birmingham are to be sold off in a deal forecast to cost taxpayers more than £300m.
The athlete’s village, in Perry Barr, was built by the city council to host athletes during the Games in 2022.
But the development was delayed due to coronavirus and athletes were housed in student accommodation instead with the 968 completed apartments sitting empty since they were completed in April 2023.
A council report showed £325m was spent by the local authority on the scheme so far with an extra £171m from local and central government grants.
The council agreed on Thursday to sell 755 of the homes at the site to a private bidder.
A report to the council’s property committee showed the amount received will be less than the council has spent on the project and debts of between £142m and £152m were expected to remain unpaid.
The report added: “The cost of repaying and servicing this debt over a 40-year period is expected to be £8m to £9m per annum (interest and repayment)”.
That would mean a total loss of about £320m.
The council report conceded: “This will be an additional pressure to the already strained financial position of the council and compensating savings will need to be made elsewhere in the council’s budgets.”
The scheme was previously heralded as a legacy project that would create new homes and help to regenerate the Perry Barr area.
But councillor Meirion Jenkins, the Conservative's shadow cabinet member for finance, told the BBC: “It’s certainly a legacy, it’s a disastrous financial legacy.
"I think if the properties could have been sold, as was originally planned, at least at break even or maybe a profit, then I think there may be an argument for that.
“All we have now is a disastrous state-sponsored construction project that is going to cost the population of Birmingham very dearly, bearing in mind we’re talking about £2,000 per household in Birmingham as being the cost of this construction.”
In a statement on the council's website, Labour councilor and deputy council leader Sharon Thompson said: “As someone who visits Perry Barr regularly, I know the area has been transformed in recent years and is now a destination of choice for visitors or for those wishing to relocate.
“The investment in Perry Barr has brought massive benefits locally with upgraded public transport links, the stunning redevelopment of the Alexander Stadium and this deal will now deliver better housing choices for local people."
Commissioners, who were brought in to run the council due to its ongoing financial issues, have supported the sale but said lessons needed to be learned.
Their comments on the report said “rigorous analysis might well highlight areas of optimism bias and lack of awareness of risk.”
“These blocks, which provide much needed new homes, have stood empty for far too long during which time the council has incurred costs of heating and securing them without using a scarce asset," they added.
It had previously been confirmed the remaining 213 homes at the site will be used as social housing by the council.
It is the latest financial blow at the authority which was declared effectively bankrupt last year with the commissioners appointed to try and turn the council around.
Residents were hit with a 10% council tax rise this year as the council also wrestled with plans to make £300m of savings over the next two years.
There are also issues with a £760m equal pay claim and a bill of about £130m to fix issues with the failed implementation of its IT and finance system Oracle.
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