‘Brummie Bonds’ raise £45m for new housing Council chief hails revolutionary scheme as it starts to pay off
BIRMINGHAM City Council has raised £45 million to build new houses through selling so-called Brummie Bonds to corporate investors.
Midlands pensions and life assurance firm Phoenix Life become the first to buy bonds issued by the council in the revolutionary fund-raising scheme.
The wave of new funding will be used to build much-needed council homes through the authority’s Birmingham Municipal Housing Trust.
The city needs to new homes by 2031.
Labour council chief John Clancy championed the idea of Brummie Bonds long before he became leader a year-and-a-half ago – often outlining the proposals in regular columns for the Post. build 89,000
A bond is a type of secure loan to a council or government through which money is raised for major projects.
The interest rate the council will pay to borrow the money is lower than that charged by the Public Works Loan Board (PWLB) which means the council will pay £1.4 million less.
Future bond issues could be used to support small and medium-sized businesses or build new infrastructure. Bonds could also be picked up by the new West Midlands Mayor to channel investment across the region.
Cllr Clancy said: “It is clear that the agreement we have reached with Phoenix Life represents a vote of confidence in Birmingham City Council by the private sector.
“With this council’s budget facing relentless austerity cuts, we must be more imaginative in identifying ways to generate funding to bring homes and jobs to Birming- ham. I am determined that Brummie Bonds programme go from strength to strength.
“This council won’t raise the white flag of surrender. To make us less reliant on rapidly shrinking Government grants, we’ll go out and bring in millions of pounds of investment that would normally go to London markets.
“Typically, this is Birmingham doing what it does best. Buckling down, being pragmatic. Brummies are doing it for themselves.”
Phoenix Life employs 600 people at its Wythall headquarters. Chief executive Andy Moss said: “I am delighted that as such a major employer in the Midlands, we have been able to provide this support to the local council whilst ensuring diversification in our investment portfolio. We hope to continue investing in our local community in the future.” the will