Birmingham City Council has approved a range of service cuts in preparation for a 21% increase in council taxes over two years. The council, which is the largest in Europe, has declared itself effectively bankrupt and needs to save £300m. The cuts were published in draft form in February and cover a range of services including reduced waste collections and dimmed street lighting. A total of 53 councillors voted in favour of the measures, with just three voting against.
Councillor John Cotton, the Labour leader of the council, apologised for the impact of the cuts on residents, which he described as “devastating”. Last September, the council warned that it would be unable to meet its financial obligations. The financial situation of local authorities across the UK is tough. Nottingham, for example, has also announced cuts to services.
Cotton argued that the wider financial issues facing local authorities were the result of actions taken by the government. The council has already agreed a £1.25bn government bail-out loan to address its issues. This loan will have to be repaid through the sale of assets. However, Birmingham’s equal pay liability exceeds £867m, whilst the council overspent on finance system Oracle by approximately £136m.
Private Eye recently reported that the council’s situation had resulted from a culture of borrowing to maintain high levels of capital spending. In response to criticism from Conservative opposition leader Robert Alden, Cotton argued that the city was facing a “perfect storm of smaller budgets but higher costs”
Read the full article from The BBC here: Read More