Birmingham City Council leader Mike Whitby has been forced to conduct the fastest U-turn of his career after appearing to suggest that the NEC and International Convention Centre could be sold to wealthy Arab investors.
Councillor Whitby quickly back-tracked following an interview with Reuters news agency in which he was reported to be preparing to raise money for the cash-strapped city by selling council-owned “crown jewel” assets – a step that six years ago he described as unthinkable.
However, leading business and political figures said he was right to consider selling off the assets – just wrong to talk about it in public.
Coun Whitby was reportedly talking to the Abu Dhabi government as he tried to forge closer links with oil-rich Middle East investors, and was quoted as saying: “We would allow them to be in partnership with our assets.”
Publicity caused by his comments, with headlines in national newspapers stating that Conservative-led Birmingham is so hard up it is planning to sell its “cherished assets”, prompted the Tory council leader to issue a statement within hours claiming his remarks had been misinterpreted.
He also appeared on a live radio interview to deny that any plans exist to sell the NEC, ICC or the council’s share in Birmingham Airport.
The interview succeeded in opening up potentially damaging differences in the council Conservative group, where some right-wingers are in favour of selling civic buildings and other assets.
Erdington Tory councillor Gareth Compton said: “I don’t think councils should be in the business of running exhibition centres and airports.”
Ladywood Conservative Party chairman Dominic Fisher added: “It’s not family silver. These are businesses that councils shouldn’t be operating. If a suitable bidder bowled up, why would any council turn down the cash?”
Twenty-four hours after the Reuters interview was published, Coun Whitby told BBC WM: “We are not talking to anybody about selling the NEC, The ICC or Symphony Hall.
“I can confirm those venues will remain in city hands. I’ll categorically say that.
“But the Government is now going to reduce its funding into local government and we need to now look at how we access and lever in the private sector.”
His clarification did not reject the possibility that Middle East fundholders might be invited to acquire a share in assets such as the NEC and ICC, while leaving ownership of the buildings in council hands.
In the Reuters interview Coun Whitby said he did not rule out forming public-private partnerships in order to kick-start regeneration projects, while stressing that he would continually examine all options for improving the NEC’s financial performance.
Significantly, the council does not intend to ask Reuters to publish an apology, clarification or correction.
The article also reported cabinet finance member Randal Brew predicting that Arab investors are interested in funding the redevelopment of Paradise Circus. Coun Brew (Con Northfield) said afterwards that he did not recall being so specific.
The planned Beorma Quarter in Digbeth, where work will soon start on a major redevelopment scheme, is the most obvious example of the council’s successful wooing of the Middle East. It is believed to have attracted about £200 million from Kuwaiti lead developer Salhia International Investments
Sources close to Coun Whitby’s office stressed that, with the council facing spending cuts of £330 million over the next four years, almost no money-making venture was being ruled out. It was highly unlikely, however, that the local authority would ever dispose of outright ownership of the NEC.
Former CBI boss Lord Digby Jones said he felt it was going public that was the issue.
He said: “As far as I am concerned there is nothing wrong with saying to the private sector ‘we would like you to buy a share in these assets from the council’.
“That gives the council money at a time when it is needed and it doesn’t need to be 100 per cent – the council could keep a minority share to have some rights and a seat on the board.
“In that respect I think Mike Whitby is right to say ‘let’s think about whether we should be selling off these assets’.’’
Edgbaston MP Gisela Stewart said: “What I think Mike Whitby’s initial statement and his subsequent retraction has done has created the worst of both worlds. It’s put off external investors and doesn’t bring the city any benefits.”