'Smoke and mirrors' - Birmingham’s latest budget plans fiercely split opinion

The Labour-run council revealed its proposals for the next financial year’s budget last week, announcing at the time that it was no longer ‘bankrupt’.

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Amid a huge financial black hole, the authority over the past couple of years approved an unprecedented wave of cuts to local services, hiked council tax and disposed of more than £250 million worth of ‘assets’.

But with the £300 million budget gap now reportedly closed and equal pay issues being tackled, council leader John Cotton has described the latest budget proposals as an “important milestone in our improvement journey”.

“I think this is a really important moment for Birmingham, being able to shed the ‘bankrupt Birmingham’ tag,” he told the Local Democracy Reporting Service last week.

“What you won’t get from me is complacency about the work that’s still to be done but this is a really positive move for our city.”

The council said at the time that its proposed budget for 2026/27 includes an extra £130m investment in council services, which would focus on cleaner, safer streets and better local services.

But if the budget is approved at full council later this month, residents can also expect a council tax rise of about 5 per cent and price rises for hundreds of council services.

At a meeting today, February 10, the Labour cabinet member for environment Coun Majid Mahmood described the proposals as a “budget we can get excited about”.

“We can now look forward to delivering the service that the people of this city need and deserve,” he said.

But opposition councillors today questioned whether the council could claim it was ‘back on track’.

Conservative councillor Robert Alden, leader of the opposition, pointed out an array of ongoing challenges, such as the bins strike and the council still needing to sell hundreds of millions of pounds worth of assets.

“This so-called ‘balanced budget’ is nothing more than smoke and mirrors,” he said in a statement shortly afterwards.

“Servicing costs are exploding and the same deep-rooted problems – from equal pay liabilities to financial mismanagement – remain unresolved.”

He went on to slam Labour’s approach, which he said had led to services being “slashed” and hikes to council tax.

Meanwhile Coun Roger Harmer, Liberal Democrats group leader, argued it was another “failed budget from Birmingham Labour”.

“John Cotton says the city is ‘back on track’ but the reality for residents is that they have seen their council tax bills soar yet again, while the city streets are in an appalling state,” he said.

“The council has jumped from crisis to crisis, with residents paying the price.

“Our streets are covered in fly tipping, our roads are crumbling, and our council tax has soared year on year.”

“Having a council not declare bankruptcy is no more than the bare minimum people would expect from any council,” he added.

‘Tough decisions’

Reacting to remarks made during the meeting, Coun Cotton told the meeting that the recent funding settlement from the Labour government was “incredibly welcome”.

“[But] it’s the actions taken by members and officers of this authority that we would be back in a balanced budget position, because of the tough decisions that we took over the last two years” he said.

“It’s sad that some seem disappointed we’ve turned a significant corner.”

Coun Cotton also took the opportunity to hit out at ‘austerity being inflicted on the council’ during the previous Conservative government.

“It’s very welcome now we’ve got a government investing in authorities like ours, recognising the deprivation and challenges the city faces.” he said.

Birmingham specific issues such as the equal pay and Oracle debacles were among the major factors that contributed to the council’s financial crisis.