Birmingham landmarks including the NEC could be sold off

“If you were the leader of Birmingham City Council at this point you have inherited a legacy of a huge legal bill, you’re facing financial cuts, you’re facing a situation where some of your basic services can no longer be delivered because of the funding formula.

“I think with a very heavy heart you face up to the fact that you’re caught between a rock and a hard place, you get the best deal to settle what was a liability that should not have occurred.”

Richard Taffler, professor of finance at Warwick Business School, said the process of valuing assets such as the NEC was done by predicting the future revenue and taking away the running costs.

“But it’s not as straightforward as that because then you have to discount back to the present, because owing to inflation, £1 is worth less in the future than it is now,” he said.

The trouble with valuing a venue such as the NEC, he added, is the uncertainty of its future performance and the amount of investment needed to make it profitable.

“[Birmingham City] council hasn’t released a financial appraisal and estimate yet, but it’s likely the NEC is probably only worth £300m.

“It is not especially cash-generative.”

Chris Benson, from law firm Leigh Day, represented women who are taking equal pay claims against Birmingham City Council.

He said there were a number of ways in which Birmingham could have avoided a £1bn bill.

“They could have settled with the workers they underpaid instead of paying London lawyers to defend the indefensible for two years,” he said.

“They could, of course, have paid the women fairly at the time, as other councils did.

“Instead they are now left with so much to pay as they owe these women many years of wages, with interest on top.”

The figures being claimed range from “the low thousands” to more than £100,000 for some full-time workers.