Birmingham council to ‘give away’ £4.2m site for high speed rail college
Land worth £4.2 million which is required to build the National High Speed Rail College will be given away by Birmingham city council, it has emerged.
The council has agreed with the Government to charge only a peppercorn rent for a 125-year lease on the valuable city centre site at Birmingham Science Park Aston.
The deal could potentially break EU contracting rules by being seen as unfairly offering state aid, according to a report to the city council cabinet.
However, the report goes on to state that as long as the college is engaged in “public education organised within the national education system funded and supervised by the state, this will not be discriminatory state aid and will not lead to a challenge”.
The report warns care must be taken to make certain the college remains within the state education system: “As the constitution of the college becomes more fully formed this situation will need to be monitored and reviewed.”
Government plans to build the HS2 engineering college on two sites in Birmingham and Doncaster were announced earlier this year. The estimated cost of the Birmingham building including fit out and equipment is £26 million – but the Government will contrinute only £20 million.
The balance has to come from the Greater Birmingham and Solihull Local Enterprise Partnership.
The cabinet report warns of a funding gap if the Department for Business Innovation and Skills cuts the size of its promised £20 million grant. Any shortfall would be met through GBSLEP and the private sector.
In any event, Birmingham city council will underwrite the cost of the project.
The report warns: “Should the funding not be confirmed by BIS and the project be cancelled then any capital costs incurred to that date would need to be funded from within the city council’s approved budget.
“An independent valuation was commissioned to assess the value of the land to be transferred for the scheme and this indicated a value of £4.2m. The basis for seeking Secretary of State consent for this transaction has been assessed in the light of city council guidelines.
“The BIS funding and GBSLEP funding allocations do not extend to cover the land value on either the Birmingham or Doncaster sites. The progress of the scheme is dependent on the transfer of land at less than best consideration.
“No reasonable alternative means of funding are available to the College. Birmingham City Council has fully supported the bid for the NCHSR on the site outlined and there is therefore no opportunity to extend to a tender process for the disposal of the land.
“The disposal will contribute to the achievement or improvement of the social economic and environmental wellbeing of the area through the development of the new college.”
The report to the cabinet describes the college as “an integral component of the emerging regional HS2 Growth Strategy” which will provide a “strong foundation to support the acquisition of skills in rail technology and management”.
The document continues: “It will offer an unparalleled opportunity for local residents to access industry – led training for new entrants and for the existing workforce wishing to gain new or updated skills in the sector.
“The college will add value to and strengthen the existing local skills infrastructure addressing skills demand of the existing rail industry and directly contribute to future needs of HS2 and other advanced engineering sectors.”
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