Birmingham City Council signs off 'devastating' cuts

Birmingham City Council has signed off a wave of cuts to services ahead of a 21% rise in council tax over two years.

The largest local authority in Europe has declared itself effectively bankrupt and needs to make £300m in savings.

The financial measures have been described by those on the Labour-led council as "devastating".

Leader John Cotton apologised "unreservedly" to people living in the city during a full meeting on Tuesday.

Last September, the council said it could not afford to meet its financial obligations.

Facing an immediate budget shortfall of £87m, it was forced to issue a section 114 notice - effectively declaring itself bankrupt - after facing equal pay claims of up to £760m, and an £80m overspend on an under-fire IT system.

The cuts were first published in draft form in February, and touch on everything from reduced waste collections to dimmed street lighting.

The crunch vote, in which 53 councillors voted for and three against, came hours before Jeremy Hunt was set to reveal his Budget.

In it, the chancellor is expected to ask councils to reduce spending on diversity schemes and consultants.

Local authorities across the country have said they are struggling to balance the books, with Nottingham also announcing big cuts to services.

Birmingham's Labour council leader Mr Cotton said the cuts were unprecedented in scale.

He blamed the government for causing wider financial issues at local council level.

"The mistakes made in Birmingham have not occurred in a vacuum and councils are facing a perfect storm of smaller budgets but higher costs," he said.

But local Conservative opposition leader Robert Alden accused city leaders of living in a fantasy land.

"It's a budget that shows just how badly Birmingham Labour have made a mess of the council's finances," he said.

No part of the council has been left untouched, with up to 600 council jobs potentially cut and libraries, parks and cultural projects all due to be affected.

Other dramatic measures include:

About 200 protesters gathered outside the Council House to demonstrate against the proposals as the budget meeting took place.

Katie, who was motivated to join over cuts to arts and culture, said she believed the measures would have ramifications for decades.

"It's not our fault that any of this has happened, yet we're not going to have access to libraries [or] world class dance and music," she said.

Residents in the city will see a 10% increase in their council tax this April and a total rise of 21% by April 2025.

The measure will bring in just £21.8m of additional council income in the 2024-25 financial year.

And further financial challenges loom for Birmingham with an equal pay liability in excess of £867m, and an overspend on IT and finance system Oracle of about £136m.

A government bail-out loan of £1.25bn has been agreed to help the council deal with the issues but that will need to be repaid through the sale of assets.

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