Birmingham City Council to vote on cuts after effective bankruptcy

By Christy Cooney & Susie Rack

BBC News

A wave of cuts to services and a 10% rise in council tax in Birmingham will be voted on by councillors later.

Ministers gave Birmingham City Council permission for the 10% rise in each of the next two years – a total increase of 21% in a move that usually requires a referendum.

Europe’s largest local authority has declared itself effectively bankrupt and is trying to make £300m of cuts.

Members of the council have described the situation as “devastating”.

Up to 600 council jobs could also be cut, with the likes of libraries, parks and cultural projects all due to be affected.

It comes amid concern over the finances of councils around the country that are expecting to face collective deficits of £5.2bn by 2026.

On Monday, Nottingham City Council approved hundreds of job losses and cuts to social and youth services as part of attempts to balance its books.

The authority’s leader David Mellen said councillors voted “with great reluctance” for the cuts.

“Things that are basic requirements – for people to have a library in their community, to have community protection officers in their streets, to have a voluntary sector that offers cheap play schemes,” he said.

“Those are the areas that we’re having to cut today because of [the] broken care system that a number of prime ministers have said that they will fix.

“There needs to be a fundamental overhaul so… areas with higher levels of deprivation, high levels of need, receive a reasonable amount of money from the government.”

According to the Local Government Association, by the 2024-25 financial year councils will have seen a 27% fall in spending power for local services since 2010.

The fall has been attributed to cuts in grants from central government, rising inflation, higher energy costs and increases to the National Living Wage.

Birmingham council’s difficulties are in part due to payouts totalling more than £1bn to settle equal pay claims brought by underpaid workers.

Last September, it issued a section 114 notice, meaning it was unable to meet its costs with existing revenues, and said its projected deficit for the 2023-24 financial year was £87m.

By law, the council will have to continue to provide certain services such as social care and bin collections, although social care will face cuts and bin collections are set to become fortnightly.

Other cost-cutting measures are expected to include the dimming of street lights and reduced spending on highway maintenance.

Footage from a meeting of the council’s cabinet last week showed one councillor, Labour’s Liz Clements, brought to tears by the withdrawal of funding for arts and creative projects in Birmingham.

“Arts aren’t a luxury,” she said. “They are actually what makes life worth living in this city and they are a reason to keep going. So I, personally, I’m really devastated about that.”

“A lot of people see it as we’re repaying their debt,” said Laura Girling, from Druids Heath.

“[Residents] need stuff round here, there’s nothing here for anybody.”

The council’s Children’s Young People and Families department needs to find £51.5m in savings over the next financial year.

Haniya Aadam, who works with young people at Green Lane Masjid and Community Centre in Small Heath, said the cuts have caused city-wide “embarrassment”.

“The youth service is a priority because, without sounding cliché, they are our future,” she said.

“What are we providing in these deprived areas for youth? How are we increasing career opportunities for these kids? How are we keeping them away from things like knife crime, gang crime?

“There’s got to be clubs that these kids can go to where they feel safe.”

Local Government Association chair Shaun Davies told the BBC’s Today that councils were seeing a record demand for services amid a record level of government cuts.

“We’ve seen 19 councils this year approach the government for exceptional financial assistance,” he said. “We’ve seen more councils go bust in the last three years than in the last 30 years.

“This is bigger than one financial settlement. This is a systematic issue that the government needs to address.”

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