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Birmingham councillors to spend £5 million on cost of living action

£5 million will be taken from Birmingham City Counci’s coffers to set up a ‘cost of living programme’ as inflation, the ongoing energy crisis, and the effects of the ‘mini-budget’ continue to affect the city's residents.

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Birmingham City Council.

Cabinet members at Birmingham City Council agreed on Tuesday to take £5 million from the council’s financial resilience reserve (FRR) to deal with the impacts of the cost of living emergency.

The council has said its initial priority areas for action will include increasing benefits take up and money advice, increasing the supply of goods to food banks, linking up libraries as warm spaces, reducing council costs via energy efficiency savings, and supporting council staff.

A ‘Cost of Living Strategic Response Group’ will be set up, 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.

Councillor 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.”

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, is not known.

Councillor Mackey said: “If the benefits are there to be 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 six per cent 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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