A UK city faces a massive council tax hike because of “Labour mismanagement”, Conservatives have claimed. Birmingham households will soon have to pay an additional 21 percent in council tax contributions.
The drastic hike comes after the city council has asked Michael Gove for permission to increase the current rate from spring this year.
Representatives asked the Secretary of State for Levelling Up, Housing and Communities to increase the total by 10 percent in April 2024 and a further 10 percent the following year.
If approved, the tax rate increase will add up to 21 percent by 2025, adding approximately £350 to average household bills in the major city.
Conservatives have said the requested increase is a sign of mismanagement by the Labour-controlled council, which effectively declared bankruptcy in September 2023.
The changes would mean residents of the average Band D property in Birmingham would have to fork over an additional £342 once the changes take shape. And in the most expensive homes within Band H, residents stand to pay an additional £685.
A Government source told the Daily Telegraph the request shows “the scale of Labour’s mismanagement in Birmingham”, and said the council would have to “hike taxes on local people to pay for their failings”.
But the council has said the most vulnerable of the city’s residents will be protected from any incoming increases.
The source suggested the actions of the Labour-led council – which operates independently of the national party – are a “flashing red warning sign” for what the party would do when in Government.
John Cotton, Birmingham City Council’s leader, said it is yet to make a final decision regarding the raise and that officials have asked to raise local taxes by more than 4.99 percent but not more than 10 percent.
He said the council understands the proposed rise is “still very tough”, but pledged to protect vulnerable families.
The council leader said: “We currently have a significant council tax support scheme in place, with approximately 115,000 households eligible for council tax support.”
“Around 75,000 households pay no council tax. There will also be support via the discretionary hardship fund.” Mr Cotton added that requesting a council tax rise would depend on what support the council receives from the Government.
Birmingham City Council issued a section 114 notice in September – the closest a UK authority can get to declaring bankruptcy, which is not possible in the UK – declaring it could not make new spending commitments.
The notice was issued largely due to a rapidly escalating equal pay claim bill of approximately £760 million and issues implementing a new £100 million IT system.
