Alarming research shows average Birmingham City Council tax bill could rocket by £286 in 2024 - here’s why

Fears are growing of inflation-busting council tax rises in Birmingham that could add up to £286 to average bills next year. The authority is effectively bankrupt and there are precedents for increases of up to 15 per cent in other areas where councils have hit financial problems.

Slough and Thurrock  were both given special dispensation to raise rates by ten per cent while, in London, Croydon council was allowed to raise rates by 15 per cent.

According to a new study via the TaxPayers’ Alliance, a 15 per cent increase in council tax – the maximum possible – would mean a £286 rise for average band D properties in Birmingham. The same percentage increase would add £571 to bills for band H properties, the top level of council tax.

City council leader Coun John Cotton said last week that a rise of 4.99 per cent had already been agreed but did not rule out Birmingham seeking more.

He told BBC Radio WM: “The government prices into its spending settlement every year that we will take the full increase that’s budgeted, which is 4.99 per cent. Clearly, if you go above that cap you need government permission. There are incidents of that happening in other areas of the country.”

Pushed on potentially upping council tax to beyond the 4.99 per cent cap, Coun Cotton said: “We’re going through all of the budget at the moment so what I’m not going to do is write a budget plan live on air. But what I will say is making sure where money is owed to the authority, we are getting that money back. We have got a fairly robust process collecting those fines and debts that are owed to us.

“But what I won’t apologise for is calling out the grotesque, unfair funding of local government generally which has seriously contributed to the situation we have found ourselves in.”

A snapshot of proposed council tax increase at Birmingham City Council

• The average band D council tax for Birmingham City Council in 2023-24 was £1,906. If council tax were to increase by five per cent it would increase the average band D council tax by £95.
• If council tax for Birmingham City Council were to rise by ten per cent it would increase the average band D council tax by £190, a difference of £95 compared to a five per cent increase.
• If council tax for Birmingham city council were to rise by 15 per cent it would increase the average band D council tax by £286, a difference of £191 compared to a five per cent increase.

John O’Connell, chief executive of the TaxPayers’ Alliance, said: “Residents in Birmingham will be rightly fearing the worst after their council’s finances collapse. Local taxpayers rightly worry they will have to pick up the tab for years of shocking mismanagement and risk-taking by town hall bosses. Urgent action will be needed to limit the damage and avoid placing all the burden on household budgets.”