Birmingham City Council has completed an investment deal with life and pensions company Phoenix Life based in Wythall.
The £45 million pound deal will assist the council to build more homes in Birmingham as part of the Birmingham Development Plan backed by central government.
The money is being lent at mutually beneficial rates of interest supporting both local jobs and regeneration of the local community.
The interest rate the council will pay to borrow the money is, lower than that charged by the Public Works Loan Board (PWLB), which means the council will pay £1.4 million less in interest over the course of the loan than would have been the case had it borrowed from the PWLB.
Phoenix Life’s Chief Executive, Andy Moss said, “Working in partnership with Birmingham City Council has enabled Phoenix to not only meet diversification targets for our annuity portfolio but to also support the council’s house building programme.”
“I am delighted that as a major employer in the Birmingham area, we have been able to arrange this deal. I would hope to see further projects of this nature in the future.”
Councillor Clancy said: “It is clear that the agreement we have reached with Phoenix Life represents a vote of confidence in Birmingham City Council by the private sector.
“With this council’s budget facing relentless austerity cuts, we must be more imaginative in identifying ways to generate funding to bring homes and jobs to Birmingham. I am determined that the Brummie Bonds programme will go from strength to strength.
“This council won’t raise the white flag of surrender. To make us less reliant on rapidly shrinking Government grants, we’ll go out and bring in millions of pounds of investment that would normally go to London markets.
“Typically, this is Birmingham doing what it does best. Buckling down, being pragmatic. Brummies are doing it for themselves.”
Phoenix Life is part of the Phoenix Group and is the largest employer in Wythall. The Group employs around 1,300 people split across the group, with around 600 based at the Wythall office, its main operating centre.