£30m Games ‘funding gap’
BIRMINGHAM City Council could be facing a funding gap for the Commonwealth Games of up to £30 million, it has been revealed.
Chiefs are looking into the possibility of introducing a hotel tax, an airport tax and a workplace parking levy in order to fill the possible gap, according to council documents.
A report for the council’s resources overview and scrutiny meeting this week states: “There is a risk that there will be a significant shortfall in partners contributions to the council’s cost of the Games, of potentially as much as £30 million as a worst case.”
The ‘partners’ referred to in the paper are the West Midlands Combined Authority (WMCA) and the Greater Birmingham and Solihull Local Enterprise Partnership, which are expected to stump up around £75 million toward the £184.7 million expected by the region. No reason is given for why there may be a shortfall in the funding, just that a minimum of £45 million is considered ‘secure’.
Noting the potential for a £30 million gap in funding, the council has put forward a series of ‘funding opportunities’.
“To mitigate this risk, a number of other funding opportunities are also being investigated,” the paper notes. These include:
A temporary airport levy, perhaps charged per passenger arriving at Birmingham Airport.
A hotels tax, which may need to be based on combined authority geography to operate effectively.
The application of a workplace parking levy, which will need to be considered in the context of the forthcoming Clean Air Zone implementation and any restrictions on the use of funding generated from such a levy.
No official budget has yet been announced, but estimates put forward with Birmingham’s bid for the 2022 Games put the projected cost of hosting the event at £750 million, of which the council and its partners are expected to provide £184.7 million.
The report goes on to say that, while it is still waiting for an official budget from the government, the council is not expecting to pay any more than was included in the original bid.
The paper adds: “The council is continuing to make the case that its overall contribution should not exceed the value set out in the bid document, of £184.7 million, and will be applying robust cost control measures to minimise the risk of overspends.”