Council wants permission to raise tax above 4.99% cap

Labour councillor John Cotton, the authority's leader, said an increase above the referendum limit would only be applied “if necessary”

Birmingham City Council will write to the government to ask for permission to raise council tax by more than the legal limit without holding a referendum.

The Labour-run authority wants to raise it above 4.99% as it faces a 7 January deadline to say how it will plug a £300m budget gap over the next two years.

But the Conservative opposition has urged the leadership to do what it can to minimise the impact on residents.

The council effectively declared itself bankrupt in September as it faced the dual challenge of an equal pay liability of £760m and an £80m overspend on an IT project.

Birmingham City Council is facing a £300m budget gap

Under existing rules, a referendum should be held if a council planned to raise council tax above 4.99%.

The decision to ask for permission from the government, to avoid such a public vote, was made during a meeting of the council’s cabinet on Tuesday.

Speaking in the meeting, council leader John Cotton said an increase above the referendum limit would only be applied “if necessary” and he would also be asking the government for financial support.

“It’s clear that we’ll need to seek exceptional financial support from the government in order to bring the council’s budget back into balance," he said.

"These are obviously very tough times, we’ve got some difficult and challenging decision ahead of us in shaping this budget.”

Conservative opposition leader, councillor Robert Alden, said the authority had “far more” work to do

The council’s budget - and any council tax rise - will be formally set in February but draft proposals outlining saving and tax rises are expected in the coming weeks.

Councillor Robert Alden, leader of the Conservative opposition, said the council had “far more” work to do on the budget.

He urged the cabinet to "minimise the impact on residents of what is going to be coming next year”.