Birmingham Commonwealth Games Bill [Lords]

Gary Sambrook Excerpts

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Thursday 11th June 2020 Commons Chamber

[Alison McGovern]

In my experience, it has not. My right hon. Friend makes an extraordinarily good point. What I think is a deterrent to the tourism industry is when local authorities cannot afford to fund the things that make events like this a success. Local authorities need the ability to make these events sustainable.

[Gary Sambrook (Birmingham, Northfield) (Con)]

Will the shadow Minister give way?

[Alison McGovern]

I will in a moment. Just let me finish responding to my right hon. Friend, although the enthusiasm for debate in this place is always to be welcomed.

Local authorities need the ability to make sure that events are a success. That is what they do best, and I know that Birmingham City Council, Sandwell Council and all the other boroughs are working their fingers to the bone to make sure that in 2022 we have a games that the whole country can be massively proud of. All the new clause seeks to do is levy a very modest amount on hotel bills so that they can succeed in those efforts.

[Gary Sambrook]

I get the point about councils needing the budget to do things, but Birmingham has proved itself to be completely useless at managing a budget. The Perry Barr bus depot will be three times over the original allotted budget. Another example is the Paradise Circus development in the city centre—all three phases of that budget were spent in the first phase. Birmingham City Council is badly managed and cannot manage a budget properly.

--- Later in debate ---

[Liam Byrne]

I, too, wish to speak in support of new clause 2; we would be content this afternoon with a commitment from the Minister that he will explore this proposal with the Chancellor in the spending review, which we know is forthcoming.

I shall give some numbers, because I think they will help this debate. The total cost of the Commonwealth games is about £778 million, about three quarters of which is being provided by Her Majesty’s Government. Some £184 million is coming from Birmingham City Council and its partners, with £25 million going towards the Alexander stadium from the combined authority, plus a further £165 million going to kick-start the housing development, including the athletes’ village, from the combined authority.

I say that because the Minister will be aware of two significant risks to the local contribution, which makes up about a quarter of the budget. First, there is a risk to the local government contribution. At the beginning of the coronavirus crisis, the Prime Minister and the Cabinet said to local authorities up and down the land, “Do whatever it takes to get through this crisis, keep the receipts and we will pay you back on the other side.” The House will be amazed to learn that the deal is now beginning to unravel and the Minister’s Cabinet colleague in the Ministry of Housing, Communities and Local Government is beginning to query whether all the bills will be paid. In a city such as Birmingham, that means we could be confronting a deficit of £164 million this year. That is why the Minister has an obligation to take steps now to de-risk the local contribution to the games.

It is not just Birmingham City Council that is in jeopardy; the combined authority is, too. We revealed just a week or two before the elections were postponed that the Mayor’s budget has a £1.2 billion black hole in it. He has made commitments £1.2 billion in excess of the funds he has available. That is because he failed to get his precept through, he failed to get any movement on supplementary business rates and the funding that was going to novate from the local enterprise partnerships to the combined authority has not come through. In addition, there is a £700 million funding gap on the transport plan, because the Department for Transport is beginning to query some of the transport schemes. The broad point I want to make is that coronavirus has created a significant risk to the local authority contribution, and it would appear that there is a significant risk in respect of the combined authority as well.

[Gary Sambrook]

On the point of commitment, it is cheap to try to bring coronavirus into this, given that we were having this discussion about the city council’s contribution before the pandemic started. I have to remind the right hon. Gentleman that it was the leader of the council, in order to get the Birmingham Commonwealth games through his own group, who made the commitment that the contributions of the city council would not have an impact on the revenue budget. He has gone back on that commitment, one that many Labour councillors are very annoyed about. So does the right hon. Gentleman share my disappointment in the leader of the council who cannot keep his own budget in order?