Anger and pride - but Birmingham is still open for business

I'm furious, writes Henrietta Brealey. And proud. Furiously proud?

The last two weeks have seen Birmingham City Council issue its section 114 notice and yet another round of speculation about the future of HS2.

For me, Birmingham City Council's announcement, and the huge national and international attention that followed, was difficult. I can only imagine how difficult a decision it was to make.

In particular, seeing Birmingham the city conflated with Birmingham's local authority's finances was a huge source of frustration.

As a city, Birmingham and its business community tell a very different story to the current difficulties of its local authority. It's one of the fastest-growing city economies in the UK, with a transformed city centre and extensive regeneration and investment under way.

It is attracting record levels of foreign direct investment and record visitor numbers. It is home to both longstanding anchor institutions and attracting new investment from leading businesses from the BBC to Goldman Sachs. It boasts the youngest population in Europe, five universities and is one of the best-connected places in the country in terms of transport links.

The fundamentals that make Birmingham a great place to invest remain compelling.

So what does the section 114 notice mean for businesses? Short term: mostly business as usual. Contracts and grants already awarded will be honoured, services will continue to be delivered and since most key business support programmes delivered by the Council are funded by the Government through the UK Shared Prosperity Fund (UKSPF) - they're ringfenced and will continue to be delivered as planned.

As for what comes next, there will be a full council meeting on Monday where it's expected that a recovery plan will be presented. Earlier this week the Secretary of State for Levelling Up, Housing and Communities announced the appointment of commissioners to oversee the council's financial decisions and management appointments. They're expected to land in Brum on 26 September.

Some of Birmingham's challenges are shared with other local authorities. The Institute for Government estimates local authorities saw their spending power fall by 31% between 2009/10 and 2021/22 following austerity measures and cuts. At the same time, demand for services has only increased. However, the scale and extent of equal pay settlements - an estimated further £650 million to £760 million - and failure of the Oracle IT system implementation are unique factors.

The urgent need is for a clear plan with momentum behind it to get the city's finances back on an even keel. Then of course, there must be accountability and understanding of just what went so wrong.

In the meantime - if there's one message to takeaway loud and clear it's that, regardless of the experiences of its local authority, Birmingham as a city remains open for business.

Then we come on to the latest round of media speculation about HS2 Phase 2b - the route linking Birmingham with Manchester. I cannot stress enough, what a bad idea it would be to axe this at this stage. HS2 can only deliver the vast majority of the benefits that make up the business case for it if it goes to Manchester.

HS2 to Manchester doubles the capacity between London and Manchester in terms of seats, more than trebles capacity between Birmingham and Manchester (from 450 to 1,500 seats per hour) and cuts the journey time between Manchester and London by almost an hour compared to the current fastest service. The full HS2 network will create space on the current rail network for up to 144 extra freight trains per day. Each freight train can take up to 76 HGVs off the road. All critical for achieving the government's target of achieving net zero by 2050.

But the benefits go far further than transport connectivity. HS2 is transformational for regeneration and investment. As we see time and time again, major investment in infrastructure unlocks and attracts other investment as improved transport connectivity increases the talent pool available for employers, makes a place more attractive to live and acts as a signal that the Government see a place as worth investing in.

We are seeing this right now in Birmingham where HS2 has catalysed the regeneration of Digbeth and beyond and is set to transform the area around the Interchange station out of all recognition. Greater Manchester's Combined Authority's HS2 and Northern Powerhouse Rail Growth Strategy sets out how they will use the opportunity to double Manchester's economic output by 2050. HS2 is the Government's greatest tool in the drive to level up to the UK.

Cost management is absolutely essential - but this constant throwing into doubt of what will or won't be built when, is farcical. There are businesses trying to build business plans around contracts linked to HS2, people whose jobs depend on it, public authorities trying to deliver transport, skills and regeneration plans that link to it, investment agencies presenting it as part of the case for investing in key places along the route and much more besides. This seemingly unending speculation and risk of salami slicing is a monumental waste of the country's time and resources.

And don't get me started on the impact on our international reputation and national pride. What kind of country can't build a railway and leaves half-finished infrastructure about the place?

So that's me this month. Furious that this brilliant city is being dragged through the wringer. Again. And proud. Proud of how far it has come, its irrepressible strengths and knowledge that, when the dust settles, we'll do what we always do: keep surprising everyone with just how good we are.

Henrietta Brealey is chief executive of Greater Birmingham Chambers of Commerce

This column first appeared in the Birmingham Post