Government owes city £100m – MP

A BIRMINGHAM MP had demanded the Treasury hand over £100 million which he says it owes to the city.

Selly Oak MP Steve McCabe says the government should reimburse Birmingham City Council after it changed the way local authorities are funded. The money could help pay for cash-strapped social services or children’s centres. It follows a series of spending cuts imposed by ministers since 2014.

First, the government cut central funding by the same proportion for every council without taking into account income from council tax.

But ministers adopted a new approach in 2016/7, apparently admitting the old system was flawed. Mr McCabe said the earlier error means Birmingham had been deprived of £100 million. He demanded the cash be repaid as he spoke in the Commons.

He said: “Birmingham, for example, has lost £100 million as a result of mistakes that the government now acknowledge, and that is money that could be spent on children’s services and social care.”

The MP said afterwards: “It’s bad enough that our services have been cut to ribbons by cuts which now prove to have been unnecessary as the Chancellor constantly revises his borrowing and deficit reduction targets but it’s a disgrace that Birmingham has lost out to the tune of an extra £100 million which should be spent on children and social care while, at the same time, the government is handing a further £5 billion to bankers rather than support essential services.”