Birmingham hit by 21pc council tax rise

Residents ‘made to pay for Labour’s failure’ and mismanaging of effectively bankrupt authority

through a 21 per cent council tax increase, a government source has said.

The Labour-run council, which declared itself effectively bankrupt last year, voted last night to make £300million of cuts over the next two years in an attempt to balance the books.

At the same time, council tax will rise by 10 per cent in April and 10 per cent the year after – adding £350 to average bills. Birmingham issued a Section 114 notice in September, meaning it had to halt all new spending, after facing equal pay claims of up to £760million and an £80million overspend on an under-fire IT system.

Independent commissioners were brought in by Michael Gove, the Levelling Up Secretary, to help run the council, which owes almost £3billion to lenders.

A source close to Mr Gove blamed Birmingham city council’s “eye-watering levels of debt” and “wasteful spending” on “severe mismanagement” by the Labour Party.

It is a “flashing red warning sign” for life under Sir Keir Starmer’s leadership, the source added.

Under the cost-cutting plans street lighting will be dimmed, bin collections will be made fortnightly, burial charges will be increased, and spending on highway maintenance will be slashed putting drivers at risk of potholes.

There will also be a new charge for dealing with rat infestations in people’s homes and gardens, prompting one Tory councillor to complain: “Only rats will prosper in Birmingham.”

The Government source said it was a sign that Sir Keir would take Britain “back to square one”, with “more spending, more borrowing, more debt and higher taxes”.

The two 10 per cent council tax increases – which add to up to 21 per cent over two years – will add around £350 to a typical Band D home and £700 on the most expensive Band H properties.

A protest gathered outside the building where the councillors were debating the budget on Monday evening, with local media reporting that hundreds of people had shown up to voice their concerns.

In an attack on the Labour Group, Morriam Jan, a Liberal Democrat councillor, asked whether it had been worth hosting a “two-week party” for the Commonwealth Games in 2022.

She claimed Labour had been warned not to go ahead with the event, adding: “Was the job bankrupting the city? Was that two-week party worth the millions of pounds worth of assets we will need to sell? Or the jobs that will be lost? Or the services that will be stopped?”

The cost of the games was estimated at £778 million, of which the council and its partners paid £184 million.