I read with more than a passing local interest – as a Birmingham fellow and a Tamworth-headquartered business – about the city’s plans to ban cars from the centre with the use of ‘zones’, and thereby move people’s journeys onto bikes and buses.

At first the story lies in the concept, but delve deeper and there are several areas the finance community needs to monitor when we look at how we’ll support people’s lives in the next decade and beyond.

When Birmingham City Council published its somewhat radical Transport Plan 2031 at the start of January, it naturally provoked positive and negative reactions. At the unveiling, a senior Birmingham councillor described the plan as “bold” and talked about the requirement to tackle air pollution and a growing population. Among a chorus of criticism, transport secretary Grant Shapps has labelled the idea as “extreme” and warned people to “be careful not to kill your city centre”.

Now the dust has settled, however, a more balanced debate is surfacing, and comparisons are being made to a similar scheme in the port city of Ghent, Belgium.

In a Guardian online article on 20 January, there were two paragraphs that struck me as of vital importance to the argument, and to what the plan could ultimately mean for the finance community:

First, in relation to Ghent: ‘Retailers and restaurants that had warned of Armageddon discovered that takings did not plummet. “Actually the economic situation has improved,” says the Green politician who led what had been controversial changes. Filip Watteeuw, deputy mayor of Ghent, points out there “has been a 17 per cent increase in restaurant and bar start-ups, and the number of empty shops has been arrested”.’

Second: ‘Birmingham plans to remove one of the most significant incentives to motoring: car parking. Businesses will be incentivised to remove parking spaces through the introduction of an annual £500-per-space workplace parking levy, and the city will build 12,800 new homes on former car parks. “Valuable land in short supply [should be] used in the most productive way possible,” the council says in its 36-page plan.’

Rejuvenation

If Birmingham’s plan is delivered successfully, as outlined, we should see an increase in commercial property uptake, which would be hugely welcome in the more rundown parts of the city centre. Just as importantly, we would ultimately witness more new homes in a city struggling to create space for housing in the central area.

The implications are huge not just for Birmingham but also for other cities and towns that will watch how this plays out with interest.

Of course, London, Bristol, Newcastle and York, to name but a few, are also undertaking vehicle reduction measures, but let’s move the argument away from the motorist.

The difference here is the scale of the change. Birmingham is one of Europe’s largest cities, being spread over 80 square miles and with over one million residents. To change its core and bring 12,800 new homes into the centre will naturally create more demand for local services and retail. This in turn should create more jobs and the requirement for the correct infrastructure to support these residents and workers.

The point of financial reference here is twofold: how do lenders adapt to the changing landscape of cities and towns; and what will be the key decision drivers of future borrowers when looking to make their next investment?

These are key questions we must begin to address now to ensure we remain solution providers for everyone who requires a financial product, both in the next decade and beyond.

Birmingham’s future blueprint could create a paradigm shift that is felt well outside the city’s boundaries.

Jo Breeden, managing director, Crystal Specialist Finance