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Commonwealth Games highlighted as risk to Birmingham

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The Birmingham Improvement Panel has said the Commonwealth Games in 2022 represents one of what the council’s external auditor has called “a unique level of one-off risks”.

The panel said if these risks, which also include demographic pressures, capital project overruns, major contract disputes, potential changes to the business rates regime, coincide “the council’s financial resilience would be sorely tested”.

The council pledged to provide £145m in capital funding for the games, of which £75m would be provided by partners, and £40m revenue expenditure to support delivery when its bid was successful in 2017. This represents 25% of the project cost, with the rest expected to be provided by central government.

However, this contribution from the council does not include its costs for the games’ athletes’ village. The panel said none of the sources of funding proposed in 2017 “appear likely to come to fruition”. Therefore, the council needed to include its contribution in its forward capital and revenue plans, increasing the risk to Birmingham’s medium term financial plan.

The plan states the estimated costs of the development will be £519m, with £185m from the West Midlands Combined Authority and central government. The rest is reliant on borrowing which the council plans to repay from the sale of the land and properties after the games.

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