Birmingham City Council has announced that it has put the NEC Group up for sale. The asset has an annual income of £2 billion per year and supports around 29,000 jobs within the city.
Birmingham City Council leader Sir Albert Bore
The sale will help to clear the council’s £1.1 billion deficit in its ongoing equal pay settlements bill, but so far the council has refused to reveal the asking price for the 611 acre estate.
As well as the National Exhibition Centre, the eventual buyer will gain additional venues such as the LG Arena, the National Indoor Arena and the International Convention Centre. Non-property assets such as The Ticket Factory, catering arm Amadeus and hospitality firm Amplify will also be included in the sale.
Birmingham City Council leader, Sir Albert Bore, points out that the original purpose of creating the council-owned NEC Group was to stimulate the local economy and drive regeneration and development within the city.
He continues; “This has been achieved, but now the NEC Group has reached a point in its evolution where it needs to be able to adopt the financial disciplines of a private, rather than a council-owned, company to enable the next stage of strategic development.”
Although job losses are not expected to be a concern as a result of the sale at this stage, Tony Rabaiotti of UNISON has warned that the union will be keeping “a close eye on the situation”.
However, professor of finance at Warwick Business School, Richard Taffler, does not share this opinion – on the contrary, he believes widespread cuts could be implemented in order to maximise the efficiency of the Group’s running costs, and this may have a negative effect upon the local economy.
He says; “One can’t trust private sector businesses to see the West Midlands economy as an important goal.
“The problem with selling such a major driver of economic activity is that a private sector business would not be running the NEC Group for the benefit of the broader community but for its own shareholders and to maximise profits.
“The private sector has very different goals to the city council.”
The high profile venue is certain to attract a great deal of interest as it provides existing operators in the sector with a valuable asset and newcomers a lucrative way into the market.
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