Birmingham City Council is seeking government approval for a 9.9% increase in council tax this year and for implementing £153 million in budget cuts.
This move comes as the council faces challenges in balancing its budget lawfully without this adjustment. Without permission, the council’s ability to raise taxes is capped at 5%.
Over the past two years, residents could have seen a cumulative 21% rise in council tax, which, following a previous increase in 2024, would translate to about £400 more annually for a band D property.
The council, which effectively declared financial insolvency in October 2023 due to challenges including £750 million in equal pay claims, has recently reached an agreement to settle these claims at a reduced cost.
John Cotton, leader of the Labour-led council, highlighted “significant progress” in addressing financial issues but acknowledged that more work lies ahead.
In opposition, Conservative leader Robert Alden criticized the proposed tax hike, describing it as a “double blow” for Birmingham residents who will likely receive reduced services despite paying more.
The Ministry of Housing, Communities and Local Government clarified that no decisions have been made regarding council tax increases, emphasizing that any rise above 5% would require exceptional justification under previous government guidelines.
“We prioritize taxpayers’ interests in all decisions related to council tax,” a ministry spokesperson affirmed, noting councils’ autonomy in setting their tax rates.
