Call for public inquiry over subsequent profits windfall for bank group.
With recent news that banking group Lloyds have sold the NEC Group for a figure in excess of £800 million, just four years after Birmingham City Council sold it to them for just £300 million, Birmingham Conservatives are calling for an inquiry into the original sale after questioning the value of the deal at the time.
Councillor Robert Alden, Leader of the Conservative group on Birmingham city council, said : “When the Labour-run council decided to sell one of our city’s crown jewels in 2014 we made the point that we did not feel like they were getting good value for money for local taxpayers, especially considering the opportunities that came with it, including the building of HS2, the development of Resorts World at the NEC site and the Big City Plan for investment and improvement near to the ICC site in the city centre, all of which were known about at the time and have contributed to the inflated profit Lloyds have now made.
“The reported value of the sale was around £300 million but in fact the money the council received was considerably less, and then you have to factor in the significant loss in revenue since the sale. Whilst Lloyds Group are clearly entitled to get the best deal for their shareholders, questions have to be asked whether this enormous profit means the city council did not do its job in getting the best deal for Birmingham tax payers.”
Councillor Debbie Clancy, Deputy Leader of the group, argues that the secrecy and timing of the decision making process added to the risk of the council getting a poorer deal and that this is part of a culture in the council that persists to this day. She said: “At the time the decision was made the papers were not made available until the meeting itself, were distributed in hard copy only to those in attendance and taken away at the end. Even now they do not appear on the council’s committee information website, even for those with a private log in.
“This approach clearly hinders proper and accountable decision making, limiting the opportunity for constructive challenge that may have led to a better deal and meaning even the cabinet members themselves cannot be said to have made a fully informed decision when they voted, instead blindly following their Leader and Whip.
“I wish I could say that since then the Kerslake review and considerable external oversight of the council has led to improvements but just this week an important report on issues with the Paradise development in the city centre were sent out late evening on the night before a 10a m cabinet meeting and took all the key information in private session, despite much of it already having appeared in the press from other sources. These incidents are far from uncommon, despite warm words about transparency, this is a council addicted to secrecy and its decision making is clearly suffering as a result.”
On calls for an inquiry, Cllr Alden added: “With ownership of the NEC now one further step removed from the City Council, the thin arguments in favour of excess secrecy about the deal have now further evaporated so we need a fully open public review of the decision taken at the time and the advice given, including why the council did not choose to retain any stake in the business or include any substantial sell on clause in the sale that could have benefited it now.
“The inquiry also needs to examine whether anyone involved in the decision making process at the time, including all the advice given, has shared in anyway in the enormous profits Lloyds have made on this deal. Questions need to be answered about how the Council could have got the value of this key asset so wrong only a few years ago.”
Cllr Alden concluded by stressing the importance of a good relationship with the new owners: “Regardless of ownership, the NEC Group remains a vital part of the local and regional economy, both financially and culturally. I look forward to working with the new owners to ensure they continue to invest in Birmingham and protect the vital interests of the NEC Group, including the ICC and Symphony Hall, in the interests of Birmingham residents and the wider West Midlands.”