Brum keen to ditch ‘bankrupt’ tag as budget passes

The leader of Birmingham City Council says this year’s budget is an important milestone for the city, around a month after it emerged from the shadow of its Section 114 notice.

Two years ago, the authority had effectively declared itself bankrupt as a result of a £750m equal pay dispute, which came on top of an in-year budget shortfall of £87m for the 2023/24 financial year.

Unveiling its budget in February, council leader Cllr John Cotton said two years of “hard choices” and a deal on equal pay had put the authority back in the black, ahead of an expected vote to pass this year’s budget on February 24.

The authority has sold off more than 1,000 properties in a bid to repair its depleted cash reserves, including the Bordesley Green Wheels site which sold for over £30m and is now set to be redeveloped as a £2bn sports quarter for the city.

In February, the authority declared it would require no additional financial support from central government for its 2026/27 spending plans, effectively putting the council back on an even keel in terms of its day-to-day revenue spending.

The budget finally passed on Wednesday, councillors voting 40 to 37 in favour of the budget proposals, following a week-long adjournment.

Cllr Cotton said: “We have reached an important milestone in the council’s recovery and that is down to the sheer hard work that has been undertaken here in Birmingham by members and officers, supported by commissioners.

“Now – thanks to two years of decisive action, tough choices, and a great deal of hard work by members, officers, and Commissioners – the Section 114 is gone, and we have ditched, once and for all, the tag of ‘Bankrupt Birmingham’.

“We have closed a £300 million budget gap, tackled our equal pay liabilities, and are getting to grips with improving the services that the council provides for the residents of Birmingham.

“I am determined that the mistakes of the past will not be repeated, as we drive further efficiencies to deliver better services and value for money for council taxpayers – there will be no backtracking on the progress that we have made over the last two years.

“I’m ambitious for Birmingham’s future. Now we will step up our work with West Midlands Mayor and Government to invest in our communities, delivering the homes, jobs and services that the people of this city deserve.”