Birmingham City Council reveals where costs axe will fall

Birmingham City Council has confirmed it has received £1.255bn in Exceptional Financial Support (EFS) from the Government which must be paid back through £750m of asset sales.

The Government has said to be granted EFS it needs to show that it is doing all that it can to reduce the scale of the request.

The bankrupt council has two years to balance its budget and make revenue savings of £293m. It’s revealed where £226m will be saved through the release of its budget, but commissioners say that if it cannot be delivered, it has “serious concerns” that the Council’s asset base won’t be large enough to request further EFS and will place a major impact on services.

John Cotton, who became leader of Birmingham City Council last May, said: “This is a really, really difficult budget and it’s a really difficult set of choices that we’ve had to make.

“We are like every other council up and down the land dealing with the consequences of a massive crisis in local government funding.

“We’ve lost £1bn from Birmingham since 2010, and that’s made this challenge even more difficult for us to meet.

“But we’re trying to set out proposals where we can bring the council back into financial stability and financial health, whilst also looking to support services that protect the most vulnerable in the city.”

The council’s £760m equal pay liability, which its called its biggest challenge, will be tackled in its EFS support

Cuts have been revealed to services with children and family services being the worst hit, with £52m set to be cut in 2024/25.

Some of the cost-saving measures include dimming streetlights, spending less maintaining roads, and making waste collections fortnightly.

A £100m redundancy scheme has been launched over the next two years to help deliver savings, with the figure included within the total request for EFS. 

Measures announced by the council include a council tax hike of the current referendum limit from 4.99% to 9.99% in both 2024/25 and 2025/26. 

The additional council tax income for 2024/25 would reduce the budget gap from £300m down to £278m. 

For Birmingham residents, this means: 

• Band A – £1,270 = £254 (£21 per month) 
• Band B – £1,482 = £296 (£25 per month) 
• Band C – £1,693 = £338 (£28 per month) 
• Band D – £1,905 = £381 (£32 per month)

Racheal Fagan, an organiser with the GMB union, said: “Birmingham City Council seem to have a plan for slashing local services, but they don’t yet have a plan for settling equal pay.

“City Council bosses are at pains to stress they need to find budget savings to settle historic equal pay claims, yet not a single penny of the wages stolen from working women has been returned.

“We need to see urgent central Government intervention on the equal pay crisis but instead, they’re trying to pass the cost onto ordinary Brummies.”