Raise council tax

Birmingham is under-resourced for a city of its size. This is partly because council tax has been kept artificially low, with multiple council tax freezes or below-inflation rises in the last five years.

Looking at council tax charges (including fire and police, excluding parish precepts) for a Band D property in 2014/15, I’ve found the following rates quoted online:

Amongst comparators in the core cities group

Dudley £1,283.70
Birmingham £1,294.16
Solihull £1,332.06
Sandwell £1,334.07
Wolverhampton £1,498.17
Coventry £1,507.82
Walsall £1,568.60
Simple average £1,402.65

Amongst other West Midlands authorities

Leeds £1,145.89
Cardiff £1,164.11
Glasgow £1,213.00
Birmingham £1,294.16
Manchester £1,382.21
Sheffield £1,493.12
Newcastle £1,514.19
Liverpool £1,584.22
Bristol £1,628.54
Nottingham £1,675.83
Simple average £1,409.53

Birmingham’s council tax would need to raise by as much as eight or nine percent if we wanted to bring it in line with the current typical council tax rates of similar cities. By my reading, the white paper suggests that a rise of this magnitude could help the city’s finances to the tune of roughly £17 million. Even a smaller, more palatable increase would help ease the burden.

Why the contribution is important

Council tax increases alone would clearly not provide anywhere near enough funds to fully resolve the current budgetary difficulties, and it is not clear how much a referendum would cost. It’s also uncertain how much of an increase (if any) Birmingham’s voters might support.

However, the current policies of central government mean that any above-inflation council tax rise requires a referendum (and Eric Pickles has recently proposed tightening these anti-democratic rules still further, by insisting that locally-elected councillors should hold a costly referendum even for below-inflation council tax increases).

Birmingham’s current comparatively low council tax fees put us at a long-term disadvantage in this environment: the playing field is not level, and if we are always restricted to small proportional increases from a lower starting level, we will never regain the spending power we need to properly serve our city, and will forever be out-resourced and out-spent by our peers.

by MartinSullivan on December 24, 2014 at 09:58AM

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Comments

  • Posted by NoelG December 31, 2014 at 10:21

    Seriously do you have any idea how much people are suffering in the city, Council tax affects the low paid so much more than the well off. Here's an idea lets not spend a million pound blocking off lanes in cotteridge and making it an even larger bottle neck, instead open the bleeding libary you just spent tens of millions on.

    The incompetence is stunning
  • Posted by FB December 31, 2014 at 15:45

    The entire point of a budget is to manage the finances that are available. The Council needs to learn to operate with the funds it has without taxing people even more. With some innovative thinking and decreases in spending money on unnecessary and wasteful schemes, it should be possible to manage.

    We know that this is regarded as a time for austerity, so instead of demanding extra money, I am afraid that cuts need to be made. Nobody is ever going to be happy with all the decisions made, but demanding extra money is just a habit which encourages increases in expenditure, which means year after year there will always be another reason to increase the rates.
  • Posted by Dave January 02, 2015 at 11:12

    This comment has been removed by a moderator.

  • Posted by MartinSullivan January 03, 2015 at 16:51

    But council tax has not been increasing every year – that’s part of the problem. For the past few years, even when it has increased, it’s increased below inflation – a cut, in real terms, so the council’s been having to try and deliver the same level of services with less and less spending power for years. There might be some small efficiencies left to be made here and there, but realistically any cuts made now will mean major reductions in real services that many people rely on.

    Council tax is a flawed system, but it’s the only one the council has at its disposal. Birmingham residents are paying less in council tax than almost all our neighbours, or residents in comparable cities. We could increase council tax by five percent and we’d still be paying below the average rates. I don’t pretend that anyone should be happy to pay more tax, but we need to maintain a basic level of services and unfortunately they have to be funded somehow.
  • Posted by Faye January 04, 2015 at 21:14

    "Council tax affects the low paid so much more than the well off."

    The above comment by NoelG is why I fully discourage the council in considering a significant increase in council tax. Research by the Department for Communities and Local Government in 2010 found that 40% of Birmingham’s population live in areas described as in the most deprived 10% in England. Added to this finding: 23% of the population live in areas in the most deprived 5%.

    "I am afraid that cuts need to be made. Nobody is ever going to be happy with all the decisions made."

    I fully support the above remark. The council, and its residents, need to come up with more innovative solutions to save money without exasperating the city's level of deprivation. I think the council has made some good suggestions - we do need to re-examine what services can be administered by the voluntary and/or charity sector. We need to look at how the private sector can work collaboratively with the council to reduce unemployment and increase the city's skill set. We need to look at combining services together and making use of technology where costs can be reduced. We need to closely monitor services that are likely to under-perform i.e. provide little-to-no social value to reduce resource and money wastage. No solutions will be nice since the budget cuts are severe but we shouldn't lose sight of what kind of city we want in the long term as we administer these cuts. I would also add that now, more so than ever, the council should sustain a close dialogue with its residents as it implements its austere measures.
  • Posted by ChrisCall January 06, 2015 at 11:05

    If it's possible to raise higher Council Tax Bands proportionately more than the lower ones then this would be a good idea. Used in tandem with the ideas the Council has already suggested for raising some fees for the services it offers, it should ensure that fewer jobs will be lost.
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