Cost of living crisis in Birmingham: 300,000 Brummies living in poverty - and thousands more at risk

Birmingham City Council has outlined plans to address the cost of living crisis for local people using practices used in the pandemic to address the issue, including protecting businesses from bankruptcy - but no update on warm banks

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More than 300,000 Brummies are currently living in poverty - and many more are at risk of falling into extreme need due to lack of finances, Birmingham City Council has warned.

It explained that the situation is exacerbated as households in the city are more at risk of exposure to higher energy due to a high number of homes being poorly insulated as it announced a £5m fund to help address the serious issue.

Six constituencies in Birmingham are among the top 13 most affected by fuel poverty - with Hodge Hill ranking as the highest in England. You can see the full listing below. The city council has announced the initial allocation of £5m from resilience reserve funds will be used for priority action areas - but has not updated on its plans for warm banks.

The local authority is setting up a ‘Cost of Living Strategic Response Group’ - comparable to the pandemic - to coordinate the voluntary sector and the NHS, to assist in fast-tracking the scheme.

In a stark intervention, cabinet documents show other priorities include protecting jobs and preventing bankruptcy for small businesses across the region.

Senior councillors who attended the meeting were warned of the “extremely serious” situation in local government, with the council expecting a budget shortfall of £80 million in 2023/24. It was recorded in February this year at £33 million.

The council said it continues to progress with ‘sound financial management’ to close the reported shortfall, but savings must be reviewed in order to keep financial viability, according to the budget report.

Energy bills are on the riseEnergy bills are on the rise
Energy bills are on the rise

What have council learders said about the cost of living crisis in Birmingham?

Ian Ward, leader of Birmingham City Council, said: “I made the intention to declare a cost of living emergency last month to bring forward this report urgently in order that we can begin to mitigate some of the impacts.

“There are already over 300,000 people across Birmingham living in relative poverty with many more highly exposed by this crisis. In the city, unemployment is running at 11 and a half per cent, which is twice the national average.

“The rate of child poverty stands at approximately 43 per cent, which equates to over 100,000 children in this city growing up in relative poverty.

“Every person in every home is in some way or another affected by this crisis, the negative impacts of the rise in the cost of living are enhanced with the pandemic, and consequently require a level of response. That is why we are declaring a cost of living emergency, and we will organise for rapid deploy of resources to assist individuals across the city.”

John Cotton, cabinet member for social justice, said the city was in a “very tough situation.” He said: “I think we all know we’re in for a tough few months, because we don’t have all the power in our hands to fix this crisis in its entirety.

“What we’re certainly not going to do is stand by. We will stand up and do a week out as a council with our partners to support communities and residents right across the city.”

Birmingham Council HouseBirmingham Council House
Birmingham Council House

Conservative councillor Ewan Mackey said it was “time to park party politics” and resolve the crisis as much as possible for the residents. “That’s what we’re all here to do and to serve,” he added.

The councillor for Roughley agreed that the council needs to push further with improving benefit access for Birmingham’s population. In a previous cabinet report, benefit uptake was significantly lower in the city, meaning the true figure of universal credit uptake, for example, are not known.

He said: “If the benefits are to be claimed by the residents, they should know that there. I don’t know how many millions has been denied this area because they’re not getting what’s required. So absolutely, if people are entitled to the benefits, they should be flagged up so that they can receive it and get the benefit they required.”

Labour councillor Sharon Thompson queried if housing and renters would be prioritised, as rates for two-year fixed mortgage pass 6% mark for first time since 2008.

She said: “Those that do have mortgages and are letting their properties out in terms of the private rented sector. We’ll see increases of between £500 plus a month, which again will have an impact on our residents. That includes the non eviction bans that have been turned down this morning by the government.

“I guess my sort of urge to everybody is that we don’t forget housing. We don’t just look at council property and talk to private landlords, but we talking to housing associations.”

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The Birmingham constituencies in the top ranking for highest fuel poverty

Hodge Hill where, as of April 1 2022, some 23,041 households, which equates to 54.5 per cent, are in fuel poverty. This is in comparison to 11,575 (27.4 per cent) in 2019.

Yardley comes sixth in the table with 20,712 properties (46.7 per cent), which is almost double the figure of three years ago. Also in the top ten is ninth-placed Ladywood, which has figures of 23,429 (46 per cent) and, again, is almost double the rate of three years earlier

Erdington is 11th with 19,918 households (45.4 per cent); Perry Barr 12th with 18,409 (45.3 per cent); and Hall Green 13th with 19,010 (45.2 per cent).

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