Birmingham City Council have announced this week that they will raise council tax by 21 per cent over the next 2 years in an attempt to cut £300 million from its budget. The struggling council asked ministers for permission to increase council tax by 10 per cent in each of the next two years in January. This comes as a significant increase from the 4.99 per cent cap that remained in place in 2023. 

The local authority warned that up to 600 job losses are also likely, though it is yet to provide details of how many jobs will be cut in each department.

This news comes as yet another attempt by Europe’s largest local authority to cut back amid financial struggles. However, Birmingham City Council’s bankruptcy announcement appears to be part of a wider trend. Since 2021, six local authorities across the country have declared themselves effectively bankrupt. 

In September 2023, the council issued a Section 114 notice, a formal admission that it was effectively bankrupt. Its dire financial position came as a result of multiple factors, including an £80 million overspend on an IT project named Oracle, and an equal pay claim bill of £760 million, which it was unable to afford. As time passes, the need to cut back on spending becomes increasingly urgent.

In a briefing on Monday 19th February, the Labour-run council announced its intention to reduce its budget by £150m in 2024-25, and the same amount in 2025-26. This will see street lights dimmed and a reduction in spending on highways maintenance, set to come in with immediate effect.

Birmingham residents can also expect fortnightly waste collections to be introduced in 2025-26 and adult social care to be cut by £23.7m in the next financial year. The Children’s, Young People and Families department will also have to find £51.5m savings after cuts.

Analysing the crisis in Birmingham City Council, BBC Political Reporter Simon Gilbert noted that ‘There’s no getting away from it, if you live in Birmingham- you are going to feel the effects of these cuts,’ and a 21 per cent increase in council tax over the next two years will make residents hundreds of pounds worse off. 

Those who benefit from adult social care and the Children, Young People and Families department are among some of the most vulnerable in Birmingham. Protests have been held in Birmingham city centre since the announcement of ‘vital’ cuts to youth services earlier in February. 

Interviewed by the BBC, 18-year-old Hamaam Shire, who attended the protest outside Birmingham Council House on 13th February, emphasised how much youth services benefitted him. “I’ve been using a youth centre for two years. I’ve had problems within my home life, I’ve had problems at school and worries, and I’ve always had a trusted adult to speak to [there],” he noted.

Councillors are due to meet on 5 March to discuss the budget further.

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