How Birmingham is using property development to re-tool its economy

The new New Street. Image: Getty.

Something I’ve noticed when visiting Birmingham over the past couple of years: parts of the city have started to feel rich.

The new glass-fronted offices of the central business district, Colmore Row, blend in better with the grand Victorian architecture that surrounds them than you have any right to expect in a city whose architectural history is as chequered as Birmingham’s. The names of the shops point to a certain prosperity, too. Nespresso. Harvey Nichols.

Colmore Row is not the whole of Birmingham – as so often in England’s regional cities, you can turn a corner and find the city centre just stops, to be replaced by crumbling housing estates or derelict industrial land. And subjective impressions are, well, subjective. But there’s a core of prosperity in Birmingham that many cities would kill for.

Part of the explanation lies in the city’s proximity to London: a number of major financial or professional service firms, refugees from the capital’s property prices, have moved chunks of their operations to the Midlands. At a Centre for Cities event in late 2014, the American urban theorist Edward Glaeser suggested that Birmingham could have a bright future providing back office services to London. The following August, HSBC announced it was moving 1,000 jobs there.

But another part of the explanation is that the city has been, literally, planning for this. In 2010, the council published the Big City Plan, a “20 year vision... supporting transformational change to create a world class city centre, delivering sustainable growth”. Cut through the thickets of jargon, and that basically means building a load of nice new shops and offices, and making sure people can get to the bloody things.

The big plan

The recent extension of the Midlands Metro tram into the city centre fits into this plan. So does the New Street station development, in which the dark and cramped concourse has been replaced by an airy light canopy, and the grim brutalist Palisades shopping mall cleaned up and rebranded Grand Central. (The tram now terminates at the confusingly named Grand Central New Street; one day it’ll extend through the nightlife district into Edgbaston.) The shopping centre’s largest retailer, John Lewis, was “lured in by the Big City Plan,” says director of planning and regeneration Waheed Nazir, one of its authors.

The extending city centre. Click to expand. Image: Birmingham City Council.

The biggest idea in the plan, though, is to extend the footprint of the city centre by 25 per cent, by transforming under-developed land on the edge of the city centre – “book ends”, Nazir calls them – into posh new retail and commercial space. The city was prevented from doing any such thing for many years by the inner ringroad (the “concrete collar”), which made it impossible to leave the city centre on foot without using a dingy subway. Burying sections of that, and re-directing traffic where possible, made it possible for the city to expand.

The Big City Plan has already seen new developments around Colmore Row, and on the West Side (the “Paradise” redevelopment, currently separating the city centre from the ICC conference hall at Centenary Square). It’s also seen the city relocate the old fashioned Bull Ring Markets from the Smithfield area around the back of the shopping centre, on the grounds that it was occupying what Nazir calls “prime real estate”.

Much of this work will come from private developers, but the city is investing too. “The game changer was keeping business rates,” says Nazir. “Suddenly TIF [tax increment funding] was viable.” TIF is, basically, a mechanism for funding developments by capturing the uplift in property values those projects will create. Doing this will give the council at least £700m of investment capital to play with, and possibly up to £1.2bn.

The city’s biggest investment priority, though, is one which it can’t control: High Speed 2, the rail link which will shave a few minutes off the journey to London. During the recent Conservative conference the city’s enthusiasm for the new rail link was literally visible on seemingly every available surface, with posters plastered all over the place. (That said when I visited the city to speak to its leaders back in the spring, whenever I asked what the city’s priorities were, everyone gave me the same identical answer: protecting vulnerable children. I got the distinct impression a memo had gone around.)

Nazir denies that talk of HS2 has been the key to the city’s regeneration – Deutsche Bank moved there in 2008, before it was even a gleam in Lord Adonis’ eye, he points out. “But it brings confidence and changes perception of the city.”

The new economy

It’d be misleading to suggest that Birmingham sees its future entirely as a sort of commuter suburb of London. Besides the central business district, the Big City Plan also proposes a number of other economic zones where it hopes employment to grow: a food hub, an advanced manufacturing hub, and so on. Council leader John Clancy vision for the city is as a “nimble, tech driven manufacturing” economy. To that end, it’s investing in facilities like the BioHub life sciences centre on the edge of the university campus.

I meet Clancy at the Innovation Birmingham Campus, a sort of tech hub in the Aston area. He was in ebullient mood: the government’s independent improvement panel, which had been monitoring the city’s children’s services department, had just left the city (the cause of that memo, one assumes), and he’d just been talking to some American visitors. “They like big things,” he said. “Well this is the largest local authority in Europe. We’ve got a £3.1bn budget and own 40 per cent of the city.”

HS2 is an “absolute game changer” he tells me. Curzon Street, the currently derelict area on the Eastside where the new terminal will be built, is “absolutely an investment hotspot that the world is interested in”.

The Metro extension, because we love a map. Click to expand. Image: Birmingham City Council.

But the opportunity is as much about skills and jobs, he adds. “We’ve been known as a motor city. Now we may very well become known as a train city.”

The city has other investment plans, too. It wants to build a Bus Rapid Transit network called Sprint. It also wants to “upgrade its housing to make it a better asset”, says Clancy.

To fund this, it’s been talking to the Treasury about increasing its borrowing powers through by launching “brummie bonds”. (This one’s gone a bit quiet since Brexit.) It’s also trying to encourage local capital to remain in the city: “It’s about re-writing things so that the pension fund is feeding back into the local economy.”


From next year, of course, despite being the leader of Britain’s largest local authority, Clancy will have a bigger figure above him: the new West Midlands metro mayor, elected by the residents of Birmingham and six other boroughs. The leaders of all seven will make up his cabinet, however. “We’re not ceding power upwards, except possibly in transport. If anything, the power of local leaders will be enhanced.” The Big City plan is likely to continue.

In terms of selling the Midlands to the world, Clancy points to an unexpected ambassador. “People in the UK don’t associate Shakespeare with Birmingham – further afield they do.” Stratford-upon-Avon isn’t technically covered by the West Midlands metro mayor, but Warwickshire is a non-constituent (that is, non-voting) member.

Birmingham doesn’t have the strongest brands among British cities, and the West Midlands has often seemed to get forgotten in the race to build a Northern Powerhouse. But when I ask him if he feels that the city is overshadowed by Manchester, Clancy – a native of Stockport, albeit one who’s been in Birmingham for 27 years – professes to be relaxed. “This is about re-balancing the economy, and I’ve no problem with the economy being rebalanced to Manchester and Birmingham.” (I’d only asked about Manchester. The reappearance of Birmingham in that list is his own.)

“Good luck to Manchester,” he adds. “I wouldn’t say I think we will match [the Greater Manchester deal], because we were late to the game politically.” Yet he is certainly ambitious for his adopted city. “We might even see parliament move here,” he adds. “They’ve got to move it anyway – and I’m sure we could accommodate the United Kingdom parliament.”

This is part three of a series on the West Midlands. You can read part one here, and part two here. Next time: onwards to Coventry.

Jonn Elledge is the editor of CityMetric. He is on Twitter, far too much, as @jonnelledge.

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What's actually in the UK government’s bailout package for Transport for London?

Wood Green Underground station, north London. Image: Getty.

On 14 May, hours before London’s transport authority ran out of money, the British government agreed to a financial rescue package. Many details of that bailout – its size, the fact it was roughly two-thirds cash and one-third loan, many conditions attached – have been known about for weeks. 

But the information was filtered through spokespeople, because the exact terms of the deal had not been published. This was clearly a source of frustration for London’s mayor Sadiq Khan, who stood to take the political heat for some of the ensuing cuts (to free travel for the old or young, say), but had no way of backing up his contention that the British government made him do it.

That changed Tuesday when Transport for London published this month's board papers, which include a copy of the letter in which transport secretary Grant Shapps sets out the exact terms of the bailout deal. You can read the whole thing here, if you’re so minded, but here are the three big things revealed in the new disclosure.

Firstly, there’s some flexibility in the size of the deal. The bailout was reported to be worth £1.6 billion, significantly less than the £1.9 billion that TfL wanted. In his letter, Shapps spells it out: “To the extent that the actual funding shortfall is greater or lesser than £1.6bn then the amount of Extraordinary Grant and TfL borrowing will increase pro rata, up to a maximum of £1.9bn in aggregate or reduce pro rata accordingly”. 

To put that in English, London’s transport network will not be grinding to a halt because the government didn’t believe TfL about how much money it would need. Up to a point, the money will be available without further negotiations.

The second big takeaway from these board papers is that negotiations will be going on anyway. This bail out is meant to keep TfL rolling until 17 October; but because the agency gets around three-quarters of its revenues from fares, and because the pandemic means fares are likely to be depressed for the foreseeable future, it’s not clear what is meant to happen after that. Social distancing, the board papers note, means that the network will only be able to handle 13 to 20% of normal passenger numbers, even when every service is running.


Shapps’ letter doesn’t answer this question, but it does at least give a sense of when an answer may be forthcoming. It promises “an immediate and broad ranging government-led review of TfL’s future financial position and future financial structure”, which will publish detailed recommendations by the end of August. That will take in fares, operating efficiencies, capital expenditure, “the current fiscal devolution arrangements” – basically, everything. 

The third thing we leaned from that letter is that, to the first approximation, every change to London’s transport policy that is now being rushed through was an explicit condition of this deal. Segregated cycle lanes, pavement extensions and road closures? All in there. So are the suspension of free travel for people under 18, or free peak-hours travel for those over 60. So are increases in the level of the congestion charge.

Many of these changes may be unpopular, but we now know they are not being embraced by London’s mayor entirely on their own merit: They’re being pushed by the Department of Transport as a condition of receiving the bailout. No wonder Khan was miffed that the latter hadn’t been published.

Jonn Elledge was founding editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.