Cllr Meirion Jenkins is the shadow cabinet member for Value for Money and Efficiency on Birmingham City Council. He was the Conservative Candidate for Bridgend in the 2015 General Election.
January 7th is the latest deadline given to Birmingham Labour by the Government’s commissioners to set a budget. As months have gone by, and deadlines have come and gone, the delay in setting a budget piles more pressure on the hard-suffering Birmingham residents. I’m not sure what will happen if Labour misses yet another deadline – it’s probably 50:50 whether I’ll find out on January 8th. Labour has formally known about the need to identify these savings since at least July 2023.
Birmingham Council needs to find savings of £300 million per year from recurring expenditure, along with about £500 million of asset sales and a council tax increase of more than five per cent – for which they will need government permission. It is speculated that the increase will be between ten per cent and 15 per cent.
In addition, Labour will ask the government for permission to set a ‘deficit’ budget. This is a contradiction in terms. It’s a budget that doesn’t balance, with the difference being made up from assumed future borrowing. The reason for this is that Labour do not believe they can even identify (let alone achieve) savings of £300 million in the first year, so, having given up, they are going to save £150m this year and then find another £150 million next year. Therefore, the theory is, that by the second year, they will have shaved £300 million off the general fund budget – about 25 per cent. Given Labour’s hopeless track record of delivering savings (they have already written off 82 per cent of this year’s savings as undeliverable), one is bound to wonder whether this £300m will ever be achieved.
We don’t even know officially how the savings that might make up this year’s £150 million will be achieved. Rumours abound, and many community services are finding it hard to plan when they don’t know if they will have funding in a month’s time and officers keep saying ‘if I have a job this time next week.’ Farcically, Labour launched a form of voluntary redundancy scheme in August (although technically it’s not quite that), only for this to be withdrawn a couple of months later as being unviable.
So, what will these eye-watering increases in council tax mean for residents? Mine is not an untypical house in my council ward, and, along with other residents in my ward, my Council Tax will increase by £272 a year with a ten per cent increase or £407 a year with a 15 per cent increase. Over two years, if similar increases follow next year, the cumulative increases will be £570 and £876 per annum, and of course, this then forms the base for future increases. A hardworking Birmingham resident paying 40 per cent income tax, would have to earn £1,460 to net an extra £876 for such a Council Tax increase. Perhaps we should follow the US model, where local taxes can be set against federal income. For example, New York state and local taxes are deductible up to $10,000 against federal taxable income. Council Tax payments should be a tax-deductible expense for income tax purposes.
Residents in my ward didn’t vote Labour – in fact, they don’t even want to be a part of Labour Birmingham (and who can blame them) – so why should they be punished for Labour’s utter, blithering incompetence? Moreover, all these increases must be seen in the context of previous Council Tax increases of 46 per cent since 2012. All this is against a background nationally, where, after thirteen years of Tory govt, we already have the highest taxes in living memory.
The argument that all Conservatives should be making is that there should be no increase in Council Tax. Increasing taxes should not be a solution to state profligacy. Labour has screwed up; they have wasted far too much taxpayer money already and should not be rewarded with even more taxes to spend. The last thing Labour should be allowed to do is increase taxes by extra large amounts. The state has overspent and the solution to this is less state spending. Citizens need protecting from useless, financially incontinent councils (and governments) and this can only be achieved with constitutional limits on the amount that we can be taxed that cannot be overturned at the whim of a reckless chancellor or local council. I also believe that there should be constitutional provisions for tax free allowances and thresholds to be increased in line with inflation. The alternative of ever increasing taxes with the consequent demotivating effects on work is a road to ruin. Moreover, why should our children, and most likely grandchildren, be saddled with debts to pay for Birmingham’s current account spending today. It’s morally wrong besides anything else.
The unions, always highly influential in the way that Labour Birmingham run the council, are now again threatening industrial action. Just last year the current Labour deputy leader of the Council was tweeting her support for claims from GMB, of which she says she is a proud member. More industrial action will of course mean more disruption for residents, and less of the services their taxes pay for, all because of an entirely dysfunctional relationship within the Left who are supposed to be running the city. This particular dispute relates to continued delays in resolving equal pay (delays which are costing the public up to £14 million each month they go unresolved) but with large-scale redundancies to come, and the prospect of losers as well as winners from any equalisation of the pay structure, it is unlikely that this will be the end of industrial unrest.
Council Tax only represents about 20 per cent of the Birmingham budget. Interestingly, in Birmingham, every one per cent increase in Council Tax raises approximately £4 million. It would therefore take a 75 per cent increase in council tax to cover the full extent of Labour’s self-inflicted blackhole without any savings or asset sales – so I’m just waiting for some socialist somewhere to suggest a 75 per cent increase in council tax.