Council seeks tax rise of up to 21% over two years

Cllr John Cotton, Labour leader of Birmingham City Council.

Birmingham City Council has asked the government for permission to increase council tax by up to 10% each year for two financial years.

If permission is granted it would mean a total potential 21% overall increase for residents by April 2025.

That would be equivalent to £400 a year on a Band D property’s bill.

The exact rise will not be agreed until the council sets its budget in February, and will be affected by separate charges for police and fire.

Birmingham City Council House.

Councils legally have to hold a referendum to increase tax beyond a 4.99% cap – but the government is currently considering a special request from Birmingham to waive that condition after the Labour-run authority effectively declared bankruptcy by issuing a section 114 notice in September.

The council needs to save £300m over the next two years and its financial challenges have been compounded by a £760m equal pay bill and an £80m overspend on an IT project.

Birmingham City Council’s leader, John Cotton, had said residents would only be asked for extra money if needed, and that could depend on what additional support was received from central Government.

He told the BBC: “We have asked for a raise in the council tax limit that is not beyond 10%.

“But, clearly, we’ve taken no final decision as yet on the raising of council tax.”

He added: “We have asked for permission over two years, but clearly this is all dependent on the work that we are doing to balance the council’s budget.”

A government decision on whether to allow the exceptional increase will be made before the city council sets its budget in February.

Last month it was revealed children's services at the council would face cuts of £57m and the local authority's management budget reduced by 50%, raising fears over job losses.