Locals will end up paying for government mistakes –Ward

COUNCILS across the West Midlands face an ‘existential crisis,’ as they try to set budgets against inflation and the fallout of economic decisions from the previous government.

The Chancellor last week announced a variety of measures to help councils deliver services, including adult social care, but was criticised for introducing “stealth taxes” with measures such as freezing tax thresholds.

The chancellor, meanwhile, also made it easier to local authorities to raise council tax by 5% in a bid to bolster their finances.

Local authorities can now increase council tax by up to 5% a year from April 2023 without a referendum - 3% for all local authorities and an additional 2% for local authorities with social care responsibilities. Previously, councils could only raise council tax by 2.99% without holding a local referendum.

Council tax rises could partially fund up to £2.8 billion next year and £4.7 billion the year after for the social care sector.

Birmingham Council leader Ian Ward said people were “having to pay for government mistakes.

He claimed further increases in council tax will only “add to the burden for hard-pressed families across the country”.

He said: “The government is putting councils in an impossible position – we either increase council tax or cut the services that the most vulnerable will increasingly rely on in the coming months.

“And the reality is that an additional two per cent in Birmingham would raise around £8 million – this wouldn’t event cover our increasing costs for energy next year – which stand at £18 million. This is a sticking plaster from a government that has run out of ideas and has decided to balance the budget by passing the buck onto local authorities across the country.”

The city council faces an £80 million shortfall, originally forecast at £33 million in its budget. It significantly increased after inflation was taken into account.

Cllr Ward said: “We will continue to do all that we can to keep our services running, and to support our communities through the coming months. We are working with community organisations across the city to provide warm welcome spaces, and we are helping people to claim the benefits to which they are entitled.

“Despite the challenges ahead, I want to make it clear that Birmingham city council is on your side.”

Neighbouring Sandwell also face challenges to their budget.

The council approved a draft general budget which notes a £14.6 million gap. Efficiency savings of £9.6 million, which the council agreed to, still leave a wide financial gap.

Kerrie Carmichae, leader of Sandwell council, said: “Like all local authorities, we are facing significant financial pressures at the moment.

“We are doing everything we can to support residents and businesses through the cost of living crisis. For example, we are one of a handful of local authorities still providing 100% council tax support and we have the second lowest council tax rate in the West Midlands.”