A meeting of full council held to set the budget for 2021-22 saw members vote in favour of the proposed 4.99 per cent increase – despite an amendment put forward by the Conservative opposition for a reduced 3.99 per cent rise.
Wolverhampton’s overall budget for the coming year has been slashed by just over £15 million to £225 million to fund general services.
Councillor Louise Miles, deputy leader of the authority and cabinet member for resources, said: "We’ve been able to set a balanced budget for the next financial year without the need to make significant cuts to services.
"However, this is only possible by raising council tax by 1.99 per cent and imposing the Government’s adult social care levy which is an additional 3 per cent.
"The Government expects us to take these steps as they factor them in when calculating how much funding to give councils. We certainly do not feel we have any discretion in this respect.
"Over the last ten years, council tax as a proportion of the council’s gross income has increased by some 14.7 per cent to 24 per cent.
"The last budget set at this time last year for 2020-21 was affected and distorted by the impact of Covid-19,” she added.
"Our own projections for the medium term indicate that the budget deficit could be in the region of £29.6m over the next three years, with an estimated reduction in the collection fund relating to council tax of around £14m."
Councillor Miles also called upon Secretary of State for Local Government Robert Jenrick to fulfil his pledge to repatriate council spending. "This is particularly needed in the context of rising unemployment rates in the city," she told the meeting.
Councillor Wendy Thompson, leader of the opposition Conservative group, who proposed the amendment for a 3.99 per cent increase, said: “We realise that many families are experiencing difficult times and therefore want to be as helpful as possible.
"We realise that any rise is not good. But under the circumstances, we wanted to at least give a gesture to the residents. A lot of residents have low-paid jobs and many people are unemployed and we wanted to recognise that."
The amendment was seconded by Councillor Udey Singh, who added: “The budget being proposed could not have been balanced without the intervention of central government, who have given this Labour-controlled council £130 million in grants and funding.
"They spend close to £1.1 million a year for a communications department which continues to feed residents their narrative of how well they have been doing."
Council leader Councillor Ian Brookfield said the Conservatives were behaving “like parish councillors" and described the amendment as "gesture politics", whilst Councillor Steve Evans said it was “nothing short of a political stunt”.
Councillor Beverley Momenabadi added: "My advice to the seconder of this amendment would be to spend less time on Twitter, spend less time obsessing over the council’s comms team, and get off your backside and support the residents in their time of need."
The amendment was defeated by 42 votes to 10, with 43 members then voting in favour of the proposed 4.99 tax increase and nine against.
Councillor Miles said the amendment was a perfect example of “Orwellian double think and double speak”.
"The immediate consequences of the amendment would be that the £29.6 million deficit I referred to in my budget speech would immediately increase to over £30.7 million.
"It fails to address the consequences of the measures it suggests," she added.
Councillor Thompson, speaking after the Conservative amendment was rejected, said: "I’m disappointed that the Labour Group flatly refused to support our amendment for a lower council tax increase. Our amendment would have seen Council Tax bills nearly £20 lower for the average household. All in, the average household will now be paying over £2,000 a year in council tax.
"Rather than using the adjournment time in the meeting to consider our amendment Labour spent their time deciding different ways to attack and rebuke a move that would have seen a lower council tax increase for all of Wolverhampton. It was particularly disappointing to see one Labour councillor after the vote bragging on social media about voting down this lower increase.
"It is becoming apparent that when the Labour leader says we look after our own he is choosing to believe his rhetoric over reality. Many people, particularly those on fixed incomes, will struggle to pay their council tax bill this year. Instead of easing this struggle Labour decided to mock our move and max out the increase."