Birmingham City Council has received a document setting out ministers’ reasons for pulling funding from its £2.7bn highways Private Finance Initiative (PFI) contract but has refused to disclose it.
Last week the council's leader accused the Government of 'betrayal' by withdrawing its £50m a year contribution for the PFI contract, causing the deal to collapse.
Under the original arrangement, which would have run from 2024-2035, the council would also have put in £50m annually.
A Department for Transport (DfT) spokesperson told Highways: ‘We have confirmed an alternative approach to Birmingham’s Highway Maintenance funding to ensure better value for the taxpayer.’
The DfT told Highways that the detailed grounds on which the proposal was rejected have been communicated to the council.
However, the city council subsequently refused to disclose the grounds following a request from Highways.
A council spokesperson said: ‘The council has received formal confirmation from the Department of Transport that the Government will withdraw its existing funding commitment and thereby no longer allow for the continuation of the restructured Highway Maintenance and Management Services PFI and the award of the operating sub-contract relating to the same.
‘The council will now review the decision and the government’s rationale in detail and discuss how to proceed. Our priority remains continuity of service and ensuring the safety of our citizens and visitors across the network.’
Birmingham currently receives central government funding for highways through contributions to the PFI, which will continue until the end of the 2024-25 financial year through an uplift to the West Midlands City Region Sustainable Transport Settlement.
The DfT said it is committed to working with the council to ensure the continuity of highway maintenance, with new arrangements to be developed ‘over the coming weeks working together with the council and other regional stakeholders’.
