Birmingham City Council financial challenges - time to Reset

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Statement regarding Birmingham Highways Maintenance and Management Services PFI

Birmingham City Council has begun Judicial Review proceedings in relation to the Government’s decision to reject the Outline Business Case which set out the council’s proposals for the revised Highways Maintenance and Management PFI arrangement.

Birmingham’s Highways Maintenance and Management services are currently delivered through a PFI contract. The council’s Highways Maintenance and Management PFI contract is one of the largest PFI contracts in the UK and is the principal means through which the council discharges its statutory duties under the Highways Act 1980.

The contract combines approximately £50m PFI funding from government in the form of PFI credits with the council’s approximately £56m p.a. (indexed) ring-fenced revenue budget contribution for the purposes of providing routine and reactive maintenance, and major planned maintenance and investment works on the city’s highway network and highway assets.

On Thursday 30 November 2023, the council received formal confirmation from the Department of Transport that the Government will withdraw its existing funding arrangement, although proposed alternative funding that is not yet defined.

The council has commenced Judicial Review proceedings in relation to the Government’s decision.

The council’s foremost priority remains the continued delivery of statutory highway functions and services across the city, ensuring the safety of citizens and visitors across the network.

For the meantime, the council will continue to ensure the delivery of services via the current interim services contract that is delivered by Kier.

This matter is now subject to ongoing legal proceedings and therefore, it would be inappropriate for the council, its staff and/or elected members to provide any further comments in respect of this matter at this stage and pending the outcome of such proceedings.

The court has confirmed that a two-day hearing for the Judicial Review proceedings should be scheduled for no later than the end of March 2024.

Page last updated: 1 February 2024

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