Birmingham City Council signs off £300m of cuts and council tax hike

Birmingham City Council has passed what are thought to be the largest budget cuts in local authority history.

Leader of the Labour-run council Cllr John Cotton has apologised “unreservedly” to the people and communities of the city, who now face a 21% council tax hike over the next two years.

Residents of the largest local authority in Europe have been hit with a council tax increase over the current referendum limit from 4.99% to 9.99% for the next two years. The additional income for 2024/25 would reduce the £300m budget gap by just £21.8m.

The council has received £1.255bn in Exceptional Financial Support (EFS) from the Government, which must be paid back through £750m of asset sales.

It will help to tackle an equal pay liability above £867m, an overspend on IT system Oracle of £136m and support a £100m redundancy scheme when it cuts 600 jobs.

The bankrupt council has two years to balance its budget and make revenue savings of £293m. It’s now signed off where £226m will be saved with measures including dimming streetlights to save £900k, spending £12m less on maintaining roads and making waste collections fortnightly to save £4m.

Cuts to the arts and libraries have sparked outrage by the public, as grants to organisations such as the Birmingham REP Theatre, City of Birmingham Symphony Orchestra and Birmingham Royal Ballet will be cut 50% this year and 100% next year.

A raft of cuts have been made to council services, with children and family services being the worst hit, with £52m set to be cut in 2024/25.

If the council were unable to pass the budget, commissioners led by Max Caller would launch a full takeover.

Cllr John 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 £300m 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.”

In a post on X, levelling-up 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.”

Following the vote on Tuesday night, Unite’s national officer for local authorities Clare Keogh said: “Vital public services are on the brink of being all but destroyed.

“This is the culmination of years and years of brutal budget reductions by central government.

“Birmingham council’s workers, who have already suffered well over a decade of falling wages and whose efforts have ensured increasingly depleted services functioned, must not pay the price for a crisis they didn’t create.”

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