Property consultants Savills were paid a fee of £651,000 to advise Birmingham City Council on the Commonwealth Games village scheme that is now under scrutiny amid massive losses.
The project was hailed as a money spinner for the council, with grand plans to create affordable and extra care properties within a complex of apartments that would first be lived in by athletes from around the globe during the 2022 Commonwealth Games. However, the scheme was not ready in time for the Games, and has since run into multiple additional problems. The hundreds of flats stand empty still.
An internal review, published this week (Tuesday January 14), lists a range of ‘avoidable problems’, including that the scheme was ‘over valued’ from the start. The council also failed to consider the costs of delays or to protect itself from risks. The scheme is set to lose the council more than £150 million.
READ MORE: The truth about Commonwealth Games Village project that was ‘going wrong from the beginning’
The potential losses were raised at the end of last year as the level of likely loss began to emerge. Councillor Paul Tilsley, Lib Dems, Sheldon, was among those who wanted to examine what went wrong.
He told a meeting of the full council (December) that Savills’ advice was cited by then council leader Ian Ward to build a case for making major road changes in the area, at significant cost, including the demolition of the Perry Barr flyover. Savills also advised on the profit likely to accrue from the overall scheme, Cllr Ward had told the council back in 2018.
Councillor Paul Tilsley
Councillor Tilsley asked Labour leader Cllr John Cotton: “Do you think we had fair value for Savills’ advice?” Cllr Cotton said he was not willing to comment on whether or not value for money had been achieved, but said the council was committed to deliver new and affordable homes on the Perry Barr development. Cllr Tilsley pressed him again, highlighting how the loss to the city was now estimated to have risen to £150 million.
“Is there any residual commitment from Savills, legally or otherwise, (over that loss) given we developed the Perry Barr scheme with their advice and their commitment?” In response Cllr Cotton said he would ‘have to take advice on that question.’
The council has said today it would not be appropriate to comment further on the scheme beyond a brief statement.
READ MORE: Revealed – ‘appalling waste’ of Perry Barr project that will cost Brummies £8m-a-year for 40 years
Savills’ own website at savills.co.uk hails the Commonwealth Games athletes’ village project as a case study of its work. It states that Savills development team advised the council and Homes England on its planning application and masterplan for the village.
Their website also states: “The full scope of the development team’s involvement includes advising Birmingham City Council and Homes England on: land acquisition and supporting valuation; design and masterplanning; development mix and density; viability, funding and disposal.”
They also state that Savills Compulsory Purchase team were “currently advising on the estimate of compensation payable, the acquisition of a number of properties and occupational interests to ensure that delivery of vacant possession is without incident and that agreements are reasched for the settlement of claims. A number of agreements have been reached already on the project including the successful relocation of a car parts business, places of worship and numerious retail business and acquisitions are ongoing.”
Two plots of the Perry Barr Residential Scheme have been sold to Legal & General Affordable Homes
(Image: Handout)
Among the criticisms of the scheme, set out in a ‘lessons learned’ document that is being discussed at the council’s next meeting of its Cabinet next week (Tuesday 21st January), are that it was ‘over valued’, that valuation estimates failed to take account of critical factors, and that the land acquired for the project was excessive.
We put a series of questions to Savills about the fees paid and asked it if it believed it had provided a value for money service over the Perry Barr scheme. In response, they said of their involvement: “Savills was appointed by Birmingham City Council in 2018, as part of a wider professional team, to advise on the Commonwealth Games Athletes Village development in Perry Barr. The role included advice on proposals created by an independent design team.” They did not respond to additional questions.
Cllr Sharon Thompson, the council’s deputy leader and Cabinet member for economy and skills, speaking on behalf of the council on the Perry Barr scheme, said: “The report lays out difficult lessons the organisation needs to learn, and we welcome the views and recommendations from the commissioners. Birmingham City Council is being transformed, and its governance processes are being strengthened to ensure that members get the best professional advice, ensuring that these mistakes are not repeated.
“We now have the senior leadership team in place to deliver this transformation and are committed to ensuring that Birmingham City Council becomes a financially sustainable, well-run council that delivers good services to citizens. The Perry Barr residential scheme will still deliver much-needed homes for the north-west of the city, with high-quality homes for rent and sale. Crucially, many of these new homes will be affordable homes. The recent deal with Legal & General Affordable Homes will ensure that double the number of affordable homes set out in the planning application will be provided.”
She claimed it would be ‘inappropriate’ to comment further.