Birmingham council leaders are in talks with Middle East sovereign funds, hoping to plug a budget hole selling some of the billions of pounds of trophy assets owned by Britain's second city. The NEC - Britain's biggest exhibition centre, prime real estate and a stake in Birmingham Airport could all be up for grabs, councillors said, as they look to fund big capital projects at a time when the national government is demanding deep spending cuts.
Mike Whitby, leader of Birmingham City Council which represents over 1 million people and describes itself as Europe's biggest local authority, said he had been approached by sovereign wealth funds and was talking with the Abu Dhabi government as he tried to forge closer ties to the Middle East. The NEC Group, wholly owned by the council and which groups together the main exhibition centre as well as other venues such as the NIA and ICC, has fixed assets worth about 750 million pounds ($1.2 billion) according to pre-credit crisis valuations included in the council's most recent annual report.
NEC made an operating profit of almost 30 million pounds last year, on revenues of 110 million. Whitby said wealthy investors had shown a significant level of interest in the city's 'Big City Plan' redevelopment during a recent trip to Kuwait when he spoke to the country's chamber of commerce. Such asset sales and foreign investment show how councils could invest in infrastructure despite expected cuts of 20-30 percent in their budgets, and would help the government towards its goal of using the private sector to lead economic recovery.
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