A report to the Labour Cabinet on Birmingham City Council shows more than £30m of money owed to it in business rates and council tax will not be recovered. This includes £12.9m of debt that Cabinet is being formally asked to approve for write-off and another £17.3m already written-off under ‘delegated authority.’ The move comes at a time when the council is making savage cuts to council services, along with big increases in council tax, in order to balance its books after Labour’s disastrous handling of Equal Pay, the botched implementation of its Oracle finance system, and deeply entrenched failure to effectively manage its budgets. Had this money owed to the council been paid, then borrowing costs to the council could have been reduced by around £2.38m a year, more than the cost of maintaining the community library service at current levels (£2.285m).
Councillor Robert Alden (Con, Erdington), Leader of the Opposition and Birmingham Local Conservatives said:
This is yet another appalling example of Labour’s failure to look after public money. Whilst asking law-abiding residents and businesses to pay an ever-increasing amount of tax to pay for Labour mismanagement, they are failing to get the basics right and collect the money owed to pay for the services people rely on. Let's be clear, the Labour administration could have chosen to do more to recover this £30 million, and adjusted its savage cuts to services - they have decided not to. Leaving this money on the table, and cutting vital community libraries is a political choice being made by Birmingham Labour.”
Councillor Clifton Welch (Con, Kingstanding) who, along with other local conservatives has been campaigning to save his local library said
Kingstanding Library, along with all other community libraries in the city, is much loved and much needed community facility that is now at risk of closure thanks to Labour’s failure. Residents in my ward and across Birmingham will be shocked and angry to see a council that claims it cannot afford to keep these libraries open, simply writing off £30m of debt as if it doesn’t matter. Even putting to onside the hundreds of millions this Labour council has squandered, simply getting this right would have provided enough funds to keep Kingstanding fully open, and all other community libraries open.”
Notes
- Details on the write offs are contained in the Cabinet report for 10 February which can be accessed here and in appendix 6 which can be accessed here
- Debt repayments costs are based on the PWLB calculator which can be accessed https://www.dmo.gov.uk/data/pdfdatareport?reportCode=D9A.1 it assumes a 20 year borrowing term which is the maximum allowed under the terms of Birmingham’s Exceptional Financial Support package, but does not include the 1% penalty rate which they would be charged if borrowing today due to their financial position
- Library costs are based on the saving put forward in the budget in March 2024 available here CMIS > Meetings
