Calls have been made for a 'quick, clean kill' of a failing council-owned company placing a question mark over scores of jobs.

Acivico is owned by Birmingham City Council and was set up in 2012 to provide a range of construction and property-related services to the public and private sector.

But it is making 'substantial losses' and now council bosses are looking at restructuring or possibly closing down parts of the business - if not all of it.

Birmingham City Council: Council House in Victoria Square
Birmingham City Council: Council House in Victoria Square

Last year - 2017/18 - the company alone caused a £9.5m budget overspend for the authority.

Some members of the council's resources overview and scrutiny committee warned that that the council would be faced with further costs if Acivico was not closed down as soon as possible.

Cllr Paul Tilsley (Lib Dem, Sheldon) said: "If you don't have a quick, clean kill your losses are going to grow on a monthly basis."

He added: "The longer we keep Acivico hanging on the losses are going to exacerbate."

Cllr Meirion Jenkins (Cons, Sutton Mere Green) said: "If you look at the financial performance of Acivico what's supposed to happen is it is supposed to go bust. It just shuts down.

"There is a certain amount of chaos but the expenditure stops, that's what would happen in the private sector."

He added: "As it continues to perform unsuccessfully we will continue to underwrite that as a council.

"Not only is that wrong to do that with taxpayers' money, but it is unfair on other private sector competitors who have to stand on their own feet and not be subsidised by the Birmingham city taxpayer."

Cllr Jenkins also called for the council to halt any future private enterprises claiming it was not 'capable' of operating them.

Clive Heaphy, the council's corporate director of finance and governance, urged the committee to instead conduct discussions in private stating: "We do need to think about our responsibilities to the people who work at Acivico and the livelihoods of them.

"They are competing at the moment in a commercial operation and no decision has been taken to close Acivico down."

He added: "We recognise that the council and Acivico find themselves jointly in a very difficult situation, with substantial losses that had to be recognised.

"We have got expectations in the current year that those will continue.

"We have to do some form of restructuring with Acivico that may either lead to a slimmed down company operating successfully, or a closed down company.

"But whatever we do I will be recommending we do what's in the best interests of the city council and Acivico and its employees.

"We have to look at the whole picture, that is a complex piece of work which is underway."

Cllr Brett O'Reilly (Lab, Longbridge and West Heath, jobs, finance, and resources chief, stressed that there would be no quick fix to the situation.

He said: "There are a number of sensitive areas around Acivico not least the fact they employ so many people.

"It is not just a case of turning off the tap, if we did that there would be huge and in some cases catastrophic implications for ongoing projects across the authority and possibly beyond.

"It wouldn't be a sensible or prudent approach to do that."