Birmingham residents to be slapped with another eye-watering council tax rise - what it means for you

Earlier this week, the Labour-run authority revealed details of its second budget since it declared itself effectively bankrupt in 2023.

As well as proposed budget ‘savings’ of just under £150 million, which would include cuts to local services, a council tax rise of 7.5 per cent is also being considered for 2025/26.

It follows a council tax increase of 10 per cent last year, a move which sparked anger among opposition councillors and a petition which was signed by more than 11,000 residents.

Robert Alden, leader of the Conservatives at the council, previously said Brummies have been hit with a “double whammy” of higher taxes but fewer services.

Offering some hope for residents this week, council leader John Cotton said he did not anticipate council tax rising beyond the government’s normal limit on increases beyond 2025/26 – although the previous major increases are now baked into the amount taxpayers must find in future years.

He said the rise would equate to another £134 on average on the bills of hard-working Brummies.

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Usually local authorities with social care duties can only raise council tax every year by up to 4.99 per cent without a referendum.

But it was confirmed this week that the government allowed a small number of councils – including Birmingham – to bypass this cap.

Coun Cotton told the Local Democracy Reporting Service on Tuesday: “Certainly we are planning on the basis that we are not going to see further above cap increases in council tax.

“Clearly we’ve had some difficult decisions to take on that over the last couple of years. We’re awaiting to see what happens with the multi-year finance settlements [from the Labour government] and where that leaves us in terms of the budget position. But it’s my anticipation that we won’t be going above a referendum cap limit [currently the 4.99 per cent].”

Coun Cotton added that the council tax support scheme, which covers a quarter of the households in the city, would remain in place.

“I’ve always been clear throughout this, none of us wanted to be in a position where we’re putting up council tax – certainly by the extent we had to last year,” he said.

“We’re very mindful of the impact on some of the poorest in the city.”

There can be some optimism then that Birmingham residents may not have to brace themselves for a third successive council tax rise beyond 4.99 per cent.

But it’s still a painful time for the city, with ‘savings’ proposals impacting waste collection, libraries, parks, street lighting, culture, adult social care day centres, services for young people and much, much more.

Check out the latest developments in Brum and the West Mids

Coun Cotton told the media this week that the council had made a “great deal of progress” over the past 12 months on its improvement journey as well as the delivery of a “challenging” budget.

He added: “This budget plan seeks to address the major pressures that we know we have around social care and housing.”

Coun Cotton said the council was working “constructively” with the new Labour government, adding its finance settlement had provided a “significant boost”.

External auditors recently highlighted several issues and missteps which contributed to the financial turmoil at the council, including the alleged equal pay liability, inadequate budget setting, poor service management, demand led pressures and the disastrous implementation of a new IT and finance system.

Numerous Labour councillors have also pointed to the impact of funding cuts over the past decade or so and how councils across the country are struggling.