Council tax bombshell
4.99% rise, 120 job losses and £50m in cuts needed as Brum chief warns: No end to austerity
BIRMINGHAM City Council has announced that £ 50 million in cuts need to be made next year – and families will face an inflation- busting Council Tax increase.
City leader Ian Ward rejected the Prime Minister’s claim that austerity is coming to an end as the authority revealed that its 2019/ 20 budget proposals will include a huge 4.99 per cent council tax hike, more than 120 council job losses and £ 18 million of ‘ new cuts’.
The Council Tax increase is the maximum rise allowed before triggering a referendum, and also includes a two per cent social care precept.
But crucially the council will use no reserves to balance its books next year following severe criticism and a formal warning from auditors after it burned through more than £ 116 million in the last two years, and will plunder the rainy day fund to the tune of at least another £ 30 million this year.
Councillor Ward ( Lab, Shard End) said: “Although the Prime Minister has claimed austerity is over, it is not over from a local government perspective – certainly not from the numbers we are presenting.
This is still the most challenging period in Birmingham City Council’s history.”
The Council Tax proposal means residents living in Band D properties in Birmingham could likely pay around £ 65 more per year, and that does not include the additional precepts for other services such as police, fire and rescue services.
The latest budget will go out to public consultation on Tuesday November 13 but makes grim reading.
Councillor Ward says that, by the year end:
The council will have lost £ 690 million of its funding since 2010;
Up to £ 86 million needs to be slashed over the next four years, including £ 50 million in 2019/ 20;
That figure includes £ 32 million of cuts previously announced, and £ 18 million of new savings proposals;
Since 2010 the workforce has shrunk from around 25,000 staff to 10,000.
And the job cuts figure quoted for 2019/ 20 and beyond was 122 rising to 204. Councillor Ward paid tribute to employees who have ‘ kept the council going’ in recent years.
He also stated he was ‘ under no illusions’ that many residents will be affected by the detail in the budget proposals but vowed to listen to feedback, pointing out that the Council Tax increase was reduced last year following public consulta- tion. He said, however, that the budget would ‘ take the council in the direction’ of the ‘ culture change’ required.
The budget for the current financial year is forecast to be £ 12.9 million overspent after just six months.
But Birmingham is not in the same position as Northamptonshire County Council which ran out of money and had new spending blocked, the leader says.