Birmingham taxpayers face 10 per cent council tax hike despite services being axed

Birmingham City Council announced last autumn it is effectively bankrupt due a £1 billion bill for equal pay claims, a money pit IT system and other eye-watering costs.

A 10 per cent rise, which would come into force in April, would mean those living in a band D property will have to find an extra £191 a year.

The Government-parachuted commissioners to effectively run the Labour authority, which is the biggest in Europe, and gave the go-ahead for the council tax rise in April without the need for a referendum.

Levelling Up minister Michael Gove MP said: "Council tax in Birmingham is likely to increase by up to 10 per cent after the government allowed the local authority to bypass the national cap without the need for a local referendum.

Normally any proposed rise above the 4.99 per cent cap trigger a referendum, but councils can apply to bypass through issuing a section 114 notice, which Birmingham has.

Mr Gove said: "It is disappointing that Birmingham city taxpayers are having to foot the bill for the council’s poor governance and decision-making.

“Whilst the government will not oppose this request given the seriousness of the circumstances, any decision to increase council tax is solely one for Birmingham City Council, who should have taken into account the pressures that people in Birmingham are currently facing on living costs."

"The Government is of course conscious of the effect on local taxpayers, particularly those on low incomes, of having to foot part of the bill for these councils’ very significant failings. We have been clear to each of the councils that in implementing any additional increases, they should take steps to mitigate the impact on those least able to pay."

Leader of Birmingham City Council Councillor John Cotton said: "We have asked for permission to raise council tax by more than 4.99 per cent, but we will not go beyond 10 per cent.

“We know that is still very tough for families across the city and we will do everything we can to protect the most vulnerable."

Taxpayers could face another ten per cent hike next year if the current crisis continues.

Leader of the Birmingham Tories, Councillor Robert Alden, said: “Thanks to Labour’s equal pay crisis and financial mismanagement residents of Birmingham are unacceptably facing higher council tax bills for fewer services. After a year of failing to take any decisions to balance the council’s budget, Birmingham Labour have turned to a tax bombshell on Brummies instead.”

The council is currently undergoing a cost cutting programme which could see youth services decimated despite the city in the midst of a teenage stabbing epidemic.

Youth workers have been told the council's £1m anti-knife crime programme will be axed at the end of March. Youth Centres which provide vital support for vulnerable children in the city also face the axe.

A spokesman for Save Birmingham Youth Service said: "The majority of our 16 youth centres regularly feed young people when they come to sessions as they are coming hungry due to the current cost of living crisis, the levels of young people suffering adverse mental health will only increase as to will crime, teenage pregnancy etc.

"These are all areas that we address and as young people are engaged in positive and surrounded by trustworthy adults they are less likely to engage in negative or risk taking behaviour."

The new budget and council tax rises will be voted on in early March.