Birmingham City Council (BCC) has scrapped plans to relocate its wholesale market to a site in Aston due to lack of funds.
Relations between wholesalers and management on Birmingham market are tempestuous after a strike last month inflamed existing tensions over the future of the market and service charges.
In an announcement to be tabled at a BCC cabinet meeting today, the council has revealed it had to back out of plans to move to The Hub, an industrial estate in Witton, Aston.
The council has returned to the drawing board and is now looking for a smaller site which costs less. It hopes private investors will now pitch to it and identified the closure of Regional Development Agency Advantage West Midlands as a key factor in the decision.
BCC had been working with development partner PRUPIM to work on a move of the wholesale market to The Hub but ended the partnership in its decision.
Mocing the wholesale market from its Pershore Street site is part of BBC’ Big City Plan as it looks to regenerate areas of the city, including the market.
The council said in a statement: “The 35 year old market is nearing the end of its economic life and relocation remains the most appropriate means of securing its long terms future. [PRUPIM] has explored a range of options for relocation… In the current financial climate the option of relocation to a bespoke facility is not one which is affordable to the City Council. Working with traders and users of the market, new options will be explored.“
But Birmingham Wholesale Fresh Produce Association head Mark Tate claimed the council has a “hidden agenda” in trying to force out traders from the market - which is on premium land estimated to be worth £70m-80m - by pushing costs up, as closing a market with more than 1,000 employees would be “political suicide”. The council strongly refutes these claims.
Councillor Paul Tilsley, deputy leader of BCC, said: “Since the original plans to relocate the market to Witton were agreed, there have been a number of significant developments, both locally and in the national economy, which have resulted in the original plans no longer being viable.
“These have included the closure of Advantage West Midlands and loss of associated funding opportunities, the Government increasing the cost to local authorities of Prudential Borrowing and wider pressures placed upon public and private sector budgets by the prevailing economic climate.
He added: “The current wholesale market is operating at just 80 per cent occupancy and early indications suggest that 73 per cent of those tenants who responded to a recent survey wish to relocate.”
“The existing market site remains in urgent need of costly refurbishment if it is to be made fit-for-purpose in the long term, meaning relocation is still the best option both financially and for the future of the market itself.
Last month, a nationwide strike for public sector workers saw the market threatened with temporary closure and traders “stormed [head of markets] Mark Chamberlain’s office”, Birmingham Wholesale Fresh Produce Association head Mark Tate said.
The association brought an uncontested high court injunction against the authority as more than 40 employees were due to strike on Thursday 30 June.
In the event, the market stayed open with Chamberlain and assistant director of leisure and support services, environment and culture directorate Penny Smith attending at midnight.
But Tate told FPJ the situation was “desperate”, almost £6 million of business was put at risk during the strike and traders were not given enough notice about the possible action.
A council source said options over the strike were “non-existent” and it was working to address the conflict with wholesalers.
Wholesalers on the market were involved in an argument with market authorities last month over storing produce in “previously derelict” units which companies were paying a nominal fee for.
The association has given Chamberlain, who only succeeded Steve Grogan on 1 June, a vote of no confidence, Tate added.
According to minutes of a meeting between wholesalers and authorities obtained by freshinfo, council accountant Simon Hunt said last year the wholesale market cost £2.8m to run and the authority is “currently £1m short assuming fully let, but an additional £400,000 short in view of voids”.
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