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Birmingham city landmarks could be sold to pay legal claims Birmingham city landmarks could be sold to pay legal claims
(about 4 hours later)
Birmingham landmarks like the NEC could be sold to pay legal claims of more than £1bn, the city council has said. Birmingham landmarks like the NEC could be sold to pay legal claims over equal pay totalling more than £1bn, the city council has said.
The authority has agreed settlements with thousands of women who were paid less than men who did equivalent jobs.The authority has agreed settlements with thousands of women who were paid less than men who did equivalent jobs.
The council has asked law firms to submit any further claims in the next financial year because it cannot afford to pay this year, the BBC's Phil Mackie has been told.
One firm is said to be dealing with 4,000 outstanding cases.One firm is said to be dealing with 4,000 outstanding cases.
The firm has agreed to defer these until the next financial year to give the council time to pay, the BBC's Phil Mackie has been told.
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.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."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 and the International Convention Centre.Those assets include the NEC group - the National Exhibition Centre, the LG Arena, the National Indoor Arena and the International Convention Centre.
'Fire sale''Fire sale'
A confidential report was circulated among councillors asking them to consider various options, according to Mackie.A confidential report was circulated among councillors asking them to consider various options, according to Mackie.
"The council remains guarded about how quickly it needs to pay the claims, and which buildings will be offered for sale."The council remains guarded about how quickly it needs to pay the claims, and which buildings will be offered for sale.
"It doesn't want to create the impression that its hand is being forced and that it's holding a fire sale," he reported."It doesn't want to create the impression that its hand is being forced and that it's holding a fire sale," he reported.
The NEC group said no decision has yet been taken regarding a potential sale.The NEC group said no decision has yet been taken regarding a potential sale.
Richard Taffler, professor of finance at Warwick Business School, said the process of valuing assets such as the NEC is done by predicting the future revenue and taking away the running costs.Richard Taffler, professor of finance at Warwick Business School, said the process of valuing assets such as the NEC is 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."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.
He added that the trouble with valuing a venue such as the NEC is the uncertainty of its future performance and the amount of investment needed to make it profitable.He added that the trouble with valuing a venue such as the NEC 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."[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.""It is not especially cash-generative."
The problem, Professor Taffler said, is that analysis ignores non-financial aspects.The problem, Professor Taffler said, is that analysis ignores non-financial aspects.
"Birmingham City Council must be careful not to jeopardise the value of [the NEC] to the West Midlands economy."Birmingham City Council must be careful not to jeopardise the value of [the NEC] to the West Midlands economy.
"It should ensure it is sold as a going concern and that the buyer doesn't capitalise the land."It should ensure it is sold as a going concern and that the buyer doesn't capitalise the land.
"In other words, to make sure they don't knock it down and build houses.""In other words, to make sure they don't knock it down and build houses."