Birmingham City Council forced to sell the NEC to pay off £1bn wage bill after losing historic unfair pay case

 

One of Britain’s leading music and sports venues and home of the world’s largest dog show Crufts is to be sold by its owners Birmingham City Council to help settle a £1bn wage bill owed to serving and former employees.

The National Exhibition Centre, which was opened in 1976, is expected to fetch up to £300m when it goes on the market along with the LG Arena, the National Indoor Arena and the International Convention Centre.

Proceeds from the sale may help Birmingham council to meet backdated claims from thousands of cleaners, care workers, home helps and school dinner ladies who were found to have been paid less than their male colleagues for doing similar level jobs.

In announcing the move, council leader Sir Albert Bore made no mention of the equal pay liabilities but said it was time the company running the venues, the NEC Group, was transferred to the private sector.

Potential buyers could be granted a 100-year lease on the premises with shorter contracts for the arena – home of major international sporting events - and the convention centre which has hosted all three political parties at their annual conferences as well as the 1998 G8. No official asking price has yet been given. 

Sir Albert conceded the announcement was tinged with sadness. When it was built many doubted the NEC would be able to compete with London in attracting big name stars or events and it was feared that the 800-acre site near Birmingham airport would not draw mass audiences.

But it has proved a major success with its arena hosting the world’s leading acts including U2, David Bowie, Beyonce and Rihanna as well as Crufts since 1991.

It is estimated to add £2 billion to the West Midlands economy drawing two million visitors a year – a figure which is expected to grow on the completion of the adjacent international station for the new HS2 high speed rail link. A new £125 million supercasino, hotel and entertainment complex on the site is also due to open in 2015.

Sir Albert said: “A key purpose of the city council investing in establishing the NEC Group more than 30 years ago was to drive economic development and regeneration. This has been achieved, but now the NEC Group has reached a point in its evolution where it needs to be able to adopt the financial disciplines of a private, rather than a council-owned company to enable the next stage of strategic development.”

As the largest local authority in Europe, Labour-run Birmingham has been left with a vast bill as a result of claims over unfair pay. Changes in employment contracts in the late 1980s with the introduction of competitive tendering saw male employees receive weekly attendance or productivity bonuses that were not awarded to low-paid women workers on a similar grade.

Whilst most of the other local authorities which had also fallen foul of breaching equal rights laws agreed to pay up, Birmingham chose to fight the test case involving 174 female former employees all the way to the Supreme Court - eventually losing.

The council argued that the women should have brought their claims within six months of leaving their jobs.

Under the terms of the settlement women can seek six years of lost earnings. Some full time staff are now looking forward to windfalls of up to £80,000.

Michael Newman of solicitors Leigh Day, which represents 5,000 of the claimants, said the vast majority of payments were still outstanding.

He said many of the employees were expecting “life-changing” sums of money. “There were ways that Birmingham could have avoided getting into this situation in the first place but they chose not to take them,” he said.

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