Source: AFP
Councilors in the UK’s second-largest city, Birmingham, were poised on Tuesday to approve tax rises and deep cuts to public services that could include funding for the arts and reduced rubbish collection, as the city struggles to avoid bankruptcy.
Birmingham is the latest UK council to struggle with its finances, amid rising costs for services such as adult social care alongside decade-high inflation over the past two years and revenue cuts.
Many councils also blame years of underfunding by the Conservative government in Westminster, which in turn has blamed the mismanagement of authorities run by the Labor opposition.
The country’s 190 biggest local authorities — usually responsible for services ranging from rubbish collection to street lighting — have collective budget deficits of 5.2 billion pounds ($6.6 billion), according to a BBC investigation last year.
Birmingham City Council revealed in November that it could not balance its books.
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It blamed “long-standing issues” including the development of a new computer system for an £87m hole in its £3.2bn annual budget.
This caused a block on spending on all but essential services, while it looked at how to make around £300m of cuts to survive.
Proposed cost savings include fortnightly rather than weekly rubbish collections from 2025, the sale of 11 community centers and the scrapping of all arts funding.
The government has also given the council permission to increase the main local service tax by 10 per cent this year and again next year.
Both packages are set to be approved by councilors at a meeting on Tuesday.
It comes a day after their local counterparts in Nottingham, in England’s East Midlands, approved cuts to council jobs and services to try to plug a £53m budget gap.
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Croydon Council in south London has declared itself effectively insolvent in 2022 due to a £130 million black hole in its budget.
Thurrock Council in Essex, east of London, and Woking Borough Council, south-west of the capital, followed suit in the following months.
The Local Government Information Unit (LGIU), a not-for-profit group, revealed in an annual report last week that one in 10 councils say they are likely to declare themselves at risk of insolvency next year.
That figure almost halved over the next five years, according to responses from 128 councils across England.
Source: AFP
“This report, for the first time, demonstrates how widespread the desperate funding situation of councils is,” LGIU chief executive Jonathan Carr-West wrote in the report.
“That there is a structural funding issue is now impossible to deny,” he added, urging reform of the way local authorities are funded.
Source: AFP