The most significant reorganisation of Birmingham’s council-provided sports facilities in a generation is underway with the likelihood that a number of leisure centres will be closed, privatised or transferred to community ownership.

With a £3 million leisure budget deficit and the certainty of further Government public spending cuts to come, city council leader Sir Albert Bore said he had “ruled nothing in and nothing out” from a fundamental review of provision.

Councillors on Birmingham’s 10 district committees have been asked to come up with ideas to cut costs while at the same time concentrating on improving sporting participation in the city’s most deprived neighbourhoods.

Leisure centres remaining in the council’s hands will be re-branded as ‘wellbeing centres’, partly funded by the NHS according to health outcomes among the local population based on fighting obesity and increased physical activity.

Sir Albert said that while the private sector would provide sports facilities in better off areas, the market would never willingly open or run leisure centres in areas of high unemployment and social deprivation.

He hinted that people should look for alternative means of exercise and would not always be able to rely on the council to provide. He wished to see more use made of canal towpaths and parks for jogging and cycling.

A strategy to be worked up by the districts will be underpinned by the economic and financial benefits of improving the health of Birmingham people. A quarter of children aged 10 are obese and the city has lower than the national average number of residents involved in sports clubs.

Denying that he was engaged in a “hatchet job”, Sir Albert said: “It’s about using better the facilities and saying that some of these facilities might have to close because the investment needed in them is better spent somewhere else.”

He added that “tired” sports centres might be demolished, the land sold for housing and capital receipts re-invested in new leisure provision.

In a prepared media statement, the council leader said: “The city council is facing key financial challenges in the years ahead. In terms of district budgets there have been significant overspends, relating primarily to sport and leisure.

“These have been in the region of £3m per year, all ten districts, over the last three financial cycles. Significant redesign of the sport and leisure service; reductions in staffing; ending operations on school sites; and partnering with the private sector to boost income have delivered nearly £3m in savings, but there are still significant pressures.

“Decisive and urgent transformational change in the service and estate is required.”