Birmingham to sell Commonwealth Games development at loss of £320m

Birmingham built the athletes' village in Perry Barr at a cost of £496m for the Commonwealth Games, which it hosted in August 2022.

The development was intended to accommodate 6,500 athletes for the games before being retrofitted to deliver newly constructed homes ready for occupation for the general public.

The project was also part of the Perry Barr regeneration scheme, which delivered enhanced public transport infrastructure, new schools, new homes and community spaces in the area.

However, in March 2020, the council found cost pressures of £91m and decided it could not deliver the site for the games. 

The council then refocussed the programme to deliver homes ready for occupation.

More than 950 homes were constructed as part of the development, 755 of which are now to be sold by the council to a private buyer.

A council report detailing the sale noted that based on current expected disposal receipts, the council will only get a minimum of £140-150m for the sale, despite initially predicting disposal proceeds of £279m.

The council added that based on the low end of predicted disposal proceeds, borrowing of circa £142m to £152m is expected to remain unpaid.

The cost of repaying and servicing this debt over 40 years is expected to be circa £8-9m per annum, amounting to a cost of at least £320m to the council over the four-decade repayment period.

Responding to the report, Birmingham's commissioners said they "fully supported" the recommendations, but added that a "rigorous" lessons learned process must be undertaken in order to highlight areas of optimism bias and lack of awareness of risk to guide a better understanding of both current and future proposals.

"This will also go some way to addressing the other concerns of Overview and Scrutiny," they said.

Despite the loss, Cllr Sharon Thompson, Deputy Leader and Cabinet Member for Economy and Skills said the scheme made Perry Barr "a destination of choice for visitors or for those wishing to relocate".

She added: "The investment in Perry Barr has brought massive benefits locally with upgraded public transport links, the stunning redevelopment of the Alexander Stadium and this deal will now deliver better housing choices for local people."

Adam Carey