With Birmingham City Council’s ambitious ‘Our Future City Plan’ firmly in place, outlining a vision to establish Birmingham as a world leader in sustainable living and working by 2045, England’s second city is undoubtedly a great place to invest in. But as the city attracts this unprecedented level of investment and development, a clear strategy is required to ensure that the public and private sector have a joined up, collaborative approach so that these bold plans to take the city to the next level can come to fruition.
This was the message from a recent roundtable event at Fisher German’s Birmingham office, based in Colmore Row, which heard from key property professionals and investors discussing the vast opportunities the city has to offer and the barriers to realising them.
The timely discussion came as 2024 saw the UK welcome a new Labour government with a mandate for growth and a pledge to be the party of wealth creation, and Richard Parker was elected as the new Mayor of the West Midlands.
There are a number of sectors already attracting long-term capital investors in Birmingham, including life sciences, medtech and digital, and with several world-leading universities based within the city, the opportunities in these areas are only set to expand.
Compared to areas such as the Oxford-Cambridge Arc, Birmingham is less expensive to set up a business, has cheaper living costs and benefits from strong connectivity, with a wider supply chain right on its doorstep.
HS2 is also acting as a significant catalyst for growth in the area, and the scale of the city’s younger demographic also means it has a strong chance of attracting good-quality new housing.
One of the main barriers identified was public funding of essential real estate dependent services, and Birmingham City Council, like countless other local authorities across the country, is suffering from reduced government funding. It is Europe’s largest local authority district, and while its two principal sources of income are council tax and business rates, social care accounts for a significant proportion of its overall budget.
This has ultimately resulted in a planning department whose capacity is stretched, and in order to ensure that the limited resources are focused on those schemes with more financial and social impact, a great focus on strategic priorities and attribution of performance from individual developments needs to be adopted.
Delays have a real cost for investors/developers, and such costs will only adversely impact on the commercial viability of schemes Property investors with collectively billions of pounds to invest, wait for years for schemes to receive consent and the city council suffers as a result of the delayed investment and therefore deferred much-needed business rates and council tax revenues. These delays coupled with complex new building regulations, can often leave schemes commercially unviable.
Government cuts have also left the city in need of funding for the vital infrastructure to make its ambitious future plans possible – something which cannot be fixed by the private sector.
So, while Birmingham is an incredible place to invest, it is also challenging and comes with risk. It is therefore clear that a plan is needed to turn a vicious circle of delay into a virtuous circle of getting things done.
There is a need for a clear strategy which brings the public and private sector together. The partnership should also involve the city’s universities, which are all looking to grow and play their part in attracting inward investment by driving innovation.
This strategy should outline priorities and where capital should be invested to ensure that the process is as smooth and simple as possible, that everyone is working towards a collective goal and that partnership work can thrive.
The strategy should also play a part in speeding up the planning process. Planning is a problem across the country, and there is an opportunity for the private sector to support planning authorities making key decisions which will impact the future of the city. This would not be about influencing outcomes, but about developers, investors and property professionals working together in a socially responsible way to collectively assist the public sector to recognise the requisite long-term benefits of developments and how they will contribute to the city’s wider vision.
An increasing number of planners look to exit the public sector in favour of a better work-life balance and greater financial rewards. There is also the case for exploring how the council and private sector planning consultants can work together to bridge the gap and get schemes over the line.
So, while the investment opportunities in Birmingham are unparalleled, timely development is needed to unlock growth, and there needs to be collaborative, relentless determination to achieve this. Birmingham’s future prosperity will come, but a clear strategy will be key to its success.
