Birmingham Council is hiking taxes by 10pc to make up for financial mismanagement (Image: Getty)
A bankrupt city council has been warned a move to increase council tax by 10pc in order to make up for a financial blackhole caused by financial mismanagement will push families into poverty. Labour-run Birmingham City Council has received the green light from the government to raise its council tax by double the 5pc cap as it attempts to claw back ￡300m in the next two years.
Financial problems at the council were caused by officials juggling a ￡760m equal pay bill and an ￡80m overspend on an IT project leaving it to file a section 114 notice for bankruptcy.
It is thought the raise will save the council about ￡20m.
Now one of the city's foodbanks has warned the move will push more families into poverty after a similar tax increase last year had already put more on the breadline.
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Sophie Swaine at Sparkhill Food Bank told the Express some of her clients had never expected to use the service adding that some were facing total council tax rises of about 25pc.
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One of the city's food banks has warned the tax rise will force families into poverty (Image: Getty)
She told the Express: "Some of the people we work with are going to see a 25pc increase in some areas all told and we've already had enough rises in previous years.
"This is absolutely going to force more people to come and use our services, many people come in and say they never thought they would have to use a foodbank but the council have hit us hard.
"We're seeing so many people coming to us for the first time, costs are just becoming too much."
Ms Swaine says the foodbank helped 20,000 people last year and is planning to deal with 25,000 in 2024 adding that many will be coming in as a direct result of the tax rises.
Those living in the most expensive band H homes will see a tax rise of ￡390 meaning their total yearly council tax bill will be ￡4,201.45, while those living in the cheapest band A will see a rise of just over ￡127 and will be expected to cough up ￡1,397.48.
Councillor Robert Alden, the Conservative leader of the opposition at the council, said the tax rise was hitting city folk with a "double whammy" of high taxes and fewer services.
He told the Express: "Having bankrupted Birmingham, Labour is now hitting Brummies with a double whammy of higher taxes and fewer services. With a 21pc council tax rise over the next two years, council tax in Birmingham has gone up 77pc, ￡855 for the average household, since taking control of Birmingham in 2012 on a promise not to increase council tax.”
His colleague, deputy leader of the opposition Ewan Mackey, said it was wrong that ordinary people were having to foot the bill for the Labour group's failings.
Mr Mackey told the Express: "A 21pc rise in council tax over the next two years is a terrible burden to ask the residents of this city to carry to bail out this Labour administration.
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Sparkhill Food Bank says it will see a large increase in clients as a result of the tax hike (Image: Getty)
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"It has been Labour’s decisions, Labour’s weakness, and Labour’s dangerous negligence of an issue which they were fully aware of, which has created this crisis. Brummies are already suffering as a result of Labour’s failings, and now they are being asked to pay for Labour’s incompetence.
"When the national Labour Party commissioned a private, internal report into the failings at Birmingham City Council last year, that report concluded that blaming a lack of funding from central government ‘does not stand up to scrutiny’. Even the national Labour party don’t believe this Labour Administration's spin."
When rubber stamping the council's permission to increase taxes beyond the threshold, Levelling Up secretary Michael Gove said the government was doing so due to the "seriousness of the circumstances" but warned the council it "should have taken into account the pressures that people in Birmingham are currently facing on living costs" before it made the financial blunders.
If the government had not approved the council's request, it would have had to have held a referendum on the decision.
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Birmingham is not the only council to have to beg the government to allow it to raise taxes following bankruptcy, with Slough, Thurrock and Woking all making similar moves to force the public to bail them out for their own accounting errors.
Only one council has ever held a referendum before increasing council tax beyond government thresholds, when in 2015, the Bedfordshire Police and Crime Commissioner spent ￡600,000 on a referendum which it unsurprisingly lost after proposing a whopping 15.8pc increase.
Express.co.uk contacted Birmingham City Council for comment.
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