Birmingham's budget plans have been passed

Birmingham’s council tax rise of around five per cent has been given the green light after budget plans were passed through.

An eventful meeting was dramatically adjourned last week after the Labour-run city council failed to make a decision on the proposed budget for the next financial year.

As the meeting resumed on Monday, the budget plans were agreed along with amendments put forward by Liberal Democrat councillors.

Labour council leader John Cotton said last month that the budget represented the end of the ‘bankrupt Birmingham’ tag for the authority, which became engulfed by a financial crisis in 2023.

The ‘bankruptcy’ sparked a wave of alarming cuts to local services, as well as council tax hikes, over the past couple of years.

And despite a huge £300 million budget gap being closed and disruption from the ongoing bins strike, a new council tax rise of 4.99 per cent was proposed for Birmingham in 2026/27.

The government caps the amount most councils can increase their precepts by, with the cap being five per cent for councils such as Birmingham.

With the proposed rise being approved by full council today, council tax for a Band D property is set to rise from £2,237 to £2,353.17 from this April – a rise of just over £116.

This figure includes Fire and Rescue Authority and Police and Crime Commissioner precepts, which are subject to formal approval.

Asked about council tax by the Local Democracy Reporting Service, council leader John Cotton previously said: “Obviously I regret the fact that we found ourselves in the position where we had to take the increases that we did in the two previous budgets.

“We’re now back in the mainstream of local government following practice when it comes to council tax across the country.

“And we continue to maintain that very generous council tax support scheme.”

He added: “When it comes to average council tax per household, we are low end of the table compared to the other core cities.”

Amid anger over the suspension of recycling collections due to the bins strike, the council has also in the past pointed out that council tax is collected to fund local services generally.

Speaking at last week’s budget meeting, Coun Cotton told the council chamber: “Birmingham is my city.

“I’ve lived here all my life – and I was determined to get this council, and the city, back on track.

“This budget does exactly that.

“Make no mistake, there will be no backtracking on the progress that we have made over the last two years.

“But it is undeniable that Birmingham City Council is back in the mainstream of local government after setting a steady course to long-term stability.”

He also said that an extra £130 million is being invested in council services, focusing on “cleaner, safer streets and better local services”.

With local elections fast approaching, Coun Cotton added the city faces a choice between “fresh ambition and progress with Labour” or “opening the door to a politics of division and despair”.

But Birmingham Labour has faced a storm of criticism from opposition councillors, with Conservative group leader Coun Robert Alden slamming the ‘double whammy of higher taxes for fewer services’.

“Labour’s budget only passed by the skin of their teeth after their own chaos forced an adjournment and reconvening,” he said.

“This is the direct result of 14 years of failure: bankruptcy, bin mountains, dirty streets and broken promises that have left Birmingham in ruins.”

Birmingham-specific issues contributed to the council’s financial crisis, such as the equal pay and Oracle debacles, while Labour councillors have pointed the finger at funding cuts during the previous Conservative government.

The bins strike dispute between the council and Unite the union was initially triggered by the loss of the Waste Recycling and Collection Officer role.

The past 12 months or so have seen striking workers claim they face a pay cut of £8,000 – a figure the council disputes.

The authority has also repeatedly insisted that a fair offer had been made before negotiations came to an end last summer.

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