Birmingham City Council gets £180M to pass a legal budget and avoid cuts amid ongoing financial challenges.
The deal signals ongoing financial trouble, with the government granting support to 30 councils. Solihull Council also gets exceptional support, receiving £32.685 million soon. Plus, £15.615 million is needed by March 2025. Worcestershire County Council gets £33.6 million.
Many other councils also receive support. These include Barnet, Bradford, Cheshire East, and Croydon, as well as Cumberland, Eastbourne, and Enfield. Further councils are Halton, Haringey, Havering, and Medway. Newham, Nottingham, and Shropshire too receive support. Slough, Somerset, and Southampton get support in addition to Stoke-on-Trent, Swindon, and Thurrock. Trafford, West Berkshire, Windsor, Wirral, Woking, and Worthing are also aided.
The government shared the Birmingham plan. They can use £180 million in 2025-26, but will get £195 million less in 2024-25. This gives the council an extra £15 million.
This covers a budget gap, as the council wanted a 9.99% tax rise, but the government only allowed 7.49%. Income loss hurt the budget plans and budget meeting delays happened due to uncertainty. The full council will now meet on March 2 to agree on the budget.
Exceptional Financial Support assists councils, and those with money issues can apply. This isn’t necessarily a loan or bailout, but it lets them sell assets or borrow money to cover the maximum amount needed for services. Normally, asset sales fund capital projects, but EFS lets this income cover other expenses.
This action is discouraged unless it’s an emergency. Birmingham got £1.125 billion in EFS in 2024. Equal pay bills were over £800 million, redundancy costs exceeded £100 million, and paying for services needed over £200 million.
Most of the 2024-25 EFS remains unused. The equal pay settlement is not finalized, and they sold at least £250 million in assets. These include parts of Perry Barr Games village, the former Wheels site, and land at Peddimore.