Birmingham Council Approves 4.99% Tax Increase for 2026/27
Birmingham City Council has given the green light to a council tax rise of 4.99% for the 2026/27 financial year, set to take effect from April. The increase was approved during a dramatic budget meeting that saw heated debates over the council's recent financial turmoil and ongoing bins strike disruption.
Varied Impact on Residents Across Different Areas
While the basic council tax increase applies citywide, residents in specific areas will face additional charges. For a standard Band D property, the annual bill will increase from £2,237 to £2,353.17 – a rise of just over £116.
However, properties located within parish boundaries face extra precepts. In New Frankley, the parish precept for a Band D property rises by just 10p, from £34.66 to £34.76. Meanwhile, Royal Sutton Coldfield residents will see their parish precept increase by £10, from £59.96 to £69.96 – representing a significant 16.68% rise.
The Royal Sutton Coldfield precept funds the Conservative-run town council, which is responsible for numerous local services in that area.
Council Leader Defends Decision Amid Criticism
Council leader John Cotton addressed the chamber, stating the council had closed a £300 million budget gap through drastic measures including service cuts. He argued that the era of 'bankrupt Birmingham' was now over.
"Over the last two budgets, we were left with no alternative but to set above threshold council tax rises," Cotton told councillors. "We did so with heavy hearts and when I stood here last year, I promised there would not be a third. I have kept my word."
Cotton emphasized that despite recent increases, Birmingham's council tax remains below the average of core cities. He noted that 82% of Birmingham homes fall within Bands A, B or C, meaning four in five households will pay less than £2 extra per week.
The council leader also highlighted protections for vulnerable residents, stating that a quarter of Birmingham's 468,000 households qualify for council tax support, with approximately 70,000 of the most hard-pressed families paying no council tax at all.
Opposition Councillors Voice Strong Criticism
The budget meeting saw opposition councillors launch fierce attacks on the Labour administration over both the financial crisis fallout and the ongoing bins strike, now entering its second year.
Conservative group leader Robert Alden challenged the administration's claims of recovery: "This talk of fixing the council from the failed Labour administration is just that – talk. Do the Labour group really expect residents to thank them now they've claimed to have fixed the council after they effectively bankrupted it?"
Fellow Conservative councillor Deirdre Alden offered particularly harsh criticism: "14 years of Labour have transformed Birmingham into a city known across the country as one piled high with rubbish and litter, which is being picked through by rats as big as cats."
Liberal Democrat councillor Roger Harmer expressed skepticism about the council's recovery timeline: "A full recovery from the financial crisis is still some time way away amid major challenges such as the strike and Oracle. We are far from being out of the woods."
Green Party councillor Julien Pritchard challenged Cotton's assertion that the 'bankrupt Birmingham' label had been discarded: "Tell that to the residents in left behind neighbourhoods across the city."
Independent councillor Jane Jones, who recently quit the Labour party, suggested Birmingham had become the "cesspit of Europe" and a "laughing stock" on the world stage.
Background to Financial Challenges
The council's financial difficulties stem from multiple factors, including:
- The equal pay debacle that created significant liabilities
- The disastrous implementation of a new IT system
- Ongoing industrial action by bin workers
- Historical funding cuts during previous Conservative governments
Striking bin workers have previously claimed they face pay cuts of up to £8,000, though the council disputes this figure and maintains that a fair offer was made before negotiations ended last summer.
This latest 4.99% increase follows two previous substantial council tax hikes – one of approximately 10% and another of about 7.5% – implemented after the Labour-run council declared effective bankruptcy. The government typically caps council tax increases at 5%, though Birmingham obtained permission to exceed this threshold without a referendum in previous years.
