Council requests tax hike of up to 20% over two years
Birmingham residents could expect to see council tax rising by 10% each year for the next two financial years, to plug a £300m budget gap.
Leader of Birmingham City Council Cllr John Cotton, wrote to the government last month to secure permission for the hike above the legal limit of 4.99% without holding a referendum.
If the government allows a 10% increase each year, it would mean a total potential 21% overall rise for residents by April 2025. The rise would combat a £760m equal pay liability, an £80m IT overspend and a series of budget cuts.
It follows the government granting Croydon Council permission to raise its council tax in 2024/25 without a referendum and increasing by 14.99%.
Max Caller, lead commissioner of Birmingham City Council said a 10% rise in council tax is “par for the course” at effectively bankrupt councils. Speaking to BBC Politics Midlands in December, Caller said that “an extra 5% on council tax in Birmingham will raise around £20m”.
Cllr John Cotton stressed, however, that no decisions have yet been made, but will be revealed when the council sets out its budget next month.
He said: “We have asked for permission to raise council tax by more than 4.99 per cent, but we will not go beyond 10 per cent.
“We know that is still very tough for families across the city and we will do everything we can to protect the most vulnerable”.
Dudley, Coventry and Worcestershire councils are also set to increase council tax, but residents will see a rise of 4.99%.
Caller revealed before Christmas that the council will have to identify and sell £500m worth of assets in the next twelve months.
The council holds the largest land estate of any UK local authority, extending to 26,000 acres and attracts on average £34m of revenue per year from more than 6,500 property assets and over 300 of these have historic interest.
Assets include the Central Library, Birmingham Museum and Art Gallery, Aston Hall and Sarehole Mill, thought to be the inspiration for a mill in Tolkein’s Lord of the Rings. The council’s stake in Birmingham Airport could also be sold off.
The council’s first projections of where it will save £149.8m were also released last month, with children and family services being the worst hit with £57m set to be cut, followed by city operations including highways and infrastructure management with £29m.
Its operations and management will be slashed by £15.6m – almost 50% of its budget.
30% of the budget for city housing and homelessness is expected to be saved as well as almost £22m from adult and social care.
