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The Birmingham City Council has approved a plan to increase taxes by 21% and make significant cuts to public services in the next two years.
Last September, the biggest local government in Europe was compelled to declare virtual insolvency. Now, it is striving to cut costs by an exceptional amount of £300m, with the council cautioning of a major shift in its service delivery methods.
While councils are typically prevented from raising tax by more than 5 per cent without holding a referendum, Birmingham has received special dispensation from communities secretary Michael Gove to hike rates by 10 per cent in each of the next two years, in light of the council’s exceptional financial difficulties.
On Tuesday, the entire council agreed on a 21% increase over the span of two years. This would result in an approximate increase of £280 for a Band A property and £840 for a Band H property. This comes in addition to the proposed budget cuts.
During the Birmingham City Council meeting on Tuesday, Conservative leader Robert Alden addressed the Lord Mayor, stating that the budget being discussed was significant. He also mentioned that it highlighted the mismanagement of funds by the Birmingham Labour party and their lack of a solid plan to rectify the situation.
“Instead, all Birmingham’s Labour party can offer is a combination of increased taxes and reduced services.”
John Cotton acknowledges that the council must confront these challenges directly as they have no other option.
Accusing Birmingham’s council leader and its cabinet of living “in a fantasy land”, Mr Alden added: “Since Birmingham Labour took control of the council 12 years ago, every time people look at their council tax bill, it’s gone up – car park charges have gone up.
“Despite numerous tax and fee increases, it can be argued that Labour has left the council in a state of financial distress.”
Cuts include dimming street lights, making bin collections fortnightly instead of weekly, and raising burial costs. Up to 600 council jobs are also expected to be axed, with cuts proposed in social care, the arts, highways maintenance and public spaces.
Since the implementation of austerity measures in 2010, the financial resources available to local councils have drastically decreased. Birmingham is just one of eight councils that have been mandated to release a section 114 notice in the last six years, which essentially acknowledges the council’s insolvency. Prior to 2018, the last instance of a council being required to do this was in 2000.
The city of Birmingham faced financial difficulties due to complications during the implementation of new IT systems. Additionally, the council discovered an additional £760m in unresolved equal pay claims as a result of a significant court decision in 2012. This ruling required the council to pay £1.1bn to employees who claimed gender-based pay disparities.
However, John Cotton, the Labour leader of the council, points to a “national crisis in funding for local government” as the root cause. This crisis is a result of both governmental austerity measures and inadequate funding. Cotton also notes that councils nationwide are struggling with inflation and a surge in demand for services. This has led to some of the largest budget difficulties in recent history, he cautions.
2016
In September 2016, the largest local government in Europe declared that it was insolvent.
Mr Gove has given four councils permission to raise taxes by 10 per cent in the next financial year, and Nottingham City Council on Monday approved hundreds of job losses and cuts to social and youth services in a bid to reduce its £53m deficit.
Last month, during discussions about the budget proposals for Birmingham, Mr. Cotton expressed remorse for the large budget cuts and the notable rise in council tax this year.
“We are left with no choice but to confront these obstacles directly. We are committed to taking whatever measures are necessary to restore the council’s financial stability.”
According to the BBC, during Birmingham council’s cabinet meeting last week, Labour councillor Liz Clements became emotional due to the proposed cuts in the city’s arts funding.
According to Ms Clements, the arts are not a luxury but rather essential for making life worth living in this city and a source of motivation. Personally, she is deeply disheartened by their absence.
Source: independent.co.uk
