Birmingham City Council approves 9.99% council tax hike and ‘unprecedented’ cuts

Birmingham City Council has approved a 9.99% rise in council tax and a budget containing plans for “unprecedented” cuts to services.

More than 50 Labour councillors voted through a 2024/25 budget described by the city’s Conservative group leader as “a double whammy of higher taxes and fewer services”.

A five-hour council meeting on Tuesday was told £300 million of cuts over two years, including to library services, were needed to secure £1.255 billion in exceptional financial support loans from central government.

A separate motion recommending a council tax rise of 9.99% – taking annual bills for a Band D property to £1,793 – was also approved.

The Labour-run council declared itself effectively bankrupt in September last year after identifying equal pay liabilities estimated at £760 million, and is now said to be on a “narrow path to financial sustainability”, dependent on budget cuts.

During a debate on the plans, council leader John Cotton apologised to citizens for the “unprecedented” cuts, telling councillors the “budget before council today is not the budget I entered politics to set”.

Mr Cotton said: “It is not a budget I ever envisaged for our city. Sadly, however, it is a budget that reflects the significant challenges currently facing this council.

“Because the harsh reality is we must make cuts of over £300 million over the next two financial years in order to receive exceptional financial support from Government, and to meet the challenge set by commissioners.

“As the report before us states, that is unprecedented in scale and, for that, I unreservedly apologise to the people and communities of our city.”

Budget papers published last month confirmed the council was planning to raise council tax by 9.99% this year and next – a cumulative rise of around 21%.

As well as cuts to front-line services, the measures include dimming street lights to save £900,000, reducing spending on highway maintenance by £12 million and moving to fortnightly refuse collections to save £4 million a year.

The debate at Birmingham’s Council House took place a day after Nottingham City Council approved cuts to both jobs and services amid a reported £50m budget gap.

Nottingham’s ruling Labour group said the budget was passed “under duress because there was no other option” and blamed central Government funding cuts.

Speaking during the meeting of Birmingham City Council on Tuesday, Conservative group leader Robert Alden said: “Lord Mayor, this is an important budget, it’s a budget that shows just how badly Birmingham Labour have made a mess of the council’s finances and how they haven’t got a real plan to fix that mess.

“Instead all Birmingham Labour have to offer is a double whammy of higher taxes and fewer services.”

Saying the council’s finances had been “smashed on the rocks” of a failed IT system rollout, as the council ignored warnings about equal play claims, Mr Alden said: “For Brummies, the council is running out of time to fix its finances before all services loved by our city are lost.”

During his remarks to fellow councillors, Labour group leader Mr Cotton said he was committed to putting the city council back on track, with significant work still required to stabilise the IT system and “to close off once and for all our equal pay risk”.

“Progress is being made, and I want to place on record my thanks to members, to officers and the commissioners who are working tirelessly to resolve these critical issues,” he said.

But Mr Cotton said the mistakes made in Birmingham had “not occurred in a vacuum” and councils up and down the land were facing a perfect storm of smaller budgets but higher costs, leading to widespread cuts to waste collection, road repairs and leisure services.

He added: “We have sought to protect the most vulnerable, with the highest percentage of cuts coming in back-office functions rather than in the high-demand areas of adult social care and children and young families.

“In addition we have safeguarded things like well-being centres and school crossing patrols.

“Lord Mayor, I regret that council tax bills will increase by 9.99% and I know that the timing of this increase could not be worse, given the cost of-living crisis that has been exacerbated by reckless national mismanagement of the economy.”

In a statement issued following the meeting, Conservative Party chairman Richard Holden said: “When Labour run things, they run them badly.

“Labour has driven Birmingham City Council’s finances off a cliff, leaving residents with a terrible bill.

“Labour councillors are now imposing a 21% council tax increase and their catastrophic mismanagement has put 600 jobs on the line while they slam the door shut on eleven community centres and slash vital bin collections,” the Tory MP added.

In a post on X, formerly Twitter, Communities Secretary Michael Gove wrote: “Many more councils are not in the same position as Birmingham.

“The people in that great city have been terribly let down by Labour mismanagement. The contrast with the wise stewardship of West Midlands mayor Andy Street could not be starker.”