Cash-strapped councils across West Midlands facing tough decisions
Birmingham has already effectively declared bankruptcy, with Dudley now warning it faces a similar fate.
Last updated 15th Apr 2024
Cash-strapped councils in the West Midlands are facing tough decisions as they plan how much to hike council tax.
Local authority funding comes mostly from council tax and grants from central government which have seen big cuts in recent years.
The Institute for Government says grants were slashed by 40 percent in the last decade and despite an increase in response to the pandemic are still dropping by at least 21 percent.
Council tax rises have also been capped by central government, without a referendum councils are only able to raise taxes by up to just under five percent including two percent dedicated to spending on social care.
Council tax also includes ring-fenced charges, called precepts, for the police and fire services.
Between now and March councils will be debating how much to add to residents’ annual bills.
Bankrupt Birmingham is planning a ten percent increase which would push a band D property’s bill up from £1,905.73 up to £2,096.30.
Band D properties, valued in 1991 as being worth between £68,000 and £88,000, are treated as an average although in less affluent authorities they may not make up the largest number of homes affected.
In Birmingham band D covers less than ten percent of homes, band A homes, worth less than £40,000 in 1991, covers 35.5 percent of properties and their ten percent increase would mean a bill of £1,397.53 for the 2024/25 financial year.
Coventry people will face the highest bills, the city council is aiming for a 4.99 percent rise which would push charges up to £2,294.49 from £2,185.44 for band D homes.
Walsall Council will break the £2k barrier with its proposed 4.99 percent rise, which would hit a band D property with a charge of £2,084.56 from £1,985.48.
Sandwell people could also see bills top £2k with a proposed hike of 4.99 percent pushing band D from £1,930.09 to £2,026.40.
Solihull Metropolitan Borough Council’s latest financial plans also aim for a 4.99 percent rise which would make the bill in band D £1,961.53, up from the current cost of £1,868.31.
Dudley MBC’s leader admits his council is in a ‘perilous’ financial state with effective bankruptcy a real possibility but the council is still planning to be the cheapest of the West Midlands authorities.
The Black Country council is proposing a 4.99 percent rise which would take a band D home from £1,843.97 up to £1,935.98.
It is still early days in the process, there is sure to plenty of political wrangling as consultations continue before final figures are decided at full council meetings before the start of the next financial year.