New council tax bands for Birmingham residents revealed after eye-watering hikes approved for second year in a row

A critical meeting yesterday, March 4, saw councillors vote to pass through the proposed budget for the next financial year, which includes a huge raft of cuts to local services.

The authority, which declared itself effectively bankrupt around a year and a half ago, has said it needs to make enormous savings of around £150 million in 2025/26.

The Labour-run council is also planning to increase council tax by around 7.5 per cent, after another rise of just under 10 per cent last year.

This has been met with a furious backlash as opposition councillors say residents face a “double whammy” of higher taxes but fewer services.

Usually local authorities with social care duties can only raise council tax every year by up to 4.99 per cent without a referendum.

But it was confirmed earlier this year that the government allowed a small number of councils – including Birmingham – to bypass this cap.

During his opening speech at Tuesday’s meeting, council leader John Cotton apologised for another painful council tax hike.

“I am sorry that this year’s rise is again above the 4.99 per cent threshold but want to be absolutely clear – that will not be the case next year,” he said.

Coun Cotton also recently told the Local Democracy Reporting Service that the council tax support scheme, which covers a quarter of the households in the city, would remain in place.

“I’ve always been clear throughout this, none of us wanted to be in a position where we’re putting up council tax – certainly by the extent we had to last year,” he said.

The next rise in council tax, which will come into effect from April this year, means Brummies in Band D will be charged £2,237 for the 2025/26 financial year.

For comparison, the Band D council tax charge in the current financial year is £2,083.76.

Here’s a look at the proposed council tax charges for the 2025/26 financial year (these exclude New Frankley and Sutton Coldfield precepts):

Band // council tax charge in 2024/25 // proposed council tax charge in 2025/26

• Band A // £1,389.17 // £1,491.33

• Band B // £1,620.70 // £1,739.89

• Band C // £1,852.23 // £1,988.44

• Band D // £2,083.76 // £2,237.00

• Band E // £2,546.82 // £2,734.11

• Band F // £3,009.87 // £3,231.22

• Band G // £3,472.93 // £3,728.33

• Band H // £4,167.52 // £4,474.00

External auditors recently highlighted several issues and missteps which contributed to the financial turmoil at the council, including the alleged equal pay liability, inadequate budget setting, poor service management, demand led pressures and the disastrous implementation of a new IT and finance system.

Numerous Labour councillors have also pointed to the impact of funding cuts over the past decade or so and how councils across the country are struggling.

Coun John Cotton said during his speech on Tuesday that the council is now “moving in the right direction” and that its recovery journey continues at pace.

He went on to say that the Labour-run council continues “to be on the side of the people of Birmingham” and praised their relationship with Keir Starmer’s government.