The West Midlands local authorities should combine their budgets for major economic development, transport and housing in a bid to boost the region, Birmingham’s council leader has claimed.

Labour council leader Sir Albert Bore called for greater co-operation at the city-region level to not only offer strategic economic leadership but cut duplication and inefficiency at a time of shrinking public sector budgets.

He made his call during his budget speech as he revisited his theme of ‘the end of local government as we know it’ and called for a new way of working as authorities across the region wrestle with unprecedented cuts in funding.

The ruling Labour group approved a package of £86 million cuts for the 2014/15 budget – including reductions in street cleaning, libraries, bulky waste and green waste collections and reductions in community services.

The meeting was marred by two slogan-chanting, anti-cuts protesters who had to be forcibly removed from the council chamber as they shouted slogans at Sir Albert during his budget speech.

Ahead of the meeting about 150 protesters gathered in Victoria Square to call for the cuts to be withdrawn.

Sir Albert (Lab, Ladywood) told the meeting that he has ‘a radical plan’ to change the way the region works.

He said: “At the city region level we would work together with our neighbours and invest a five year devolved single funding pot of several billion pounds in transport, skills, housing and economic development. Infrastructure projects would be brought forward quickly and prioritised according to local needs.

“We would work with business to identify those needs and to leverage further investment.”

Sir Albert (Lab, Ladywood) warned that already difficult cuts had been made under both Tory-Lib Dem, and Labour run councils, and more would follow in future years under current Government spending plans.

“If we are honest, we will all admit that we had to make difficult decisions, for example reducing street cleaning or funding the arts. I hope that all parties now recognise that these cuts pose a serious threat to our public services from next year onwards.”

He vowed to ‘prioritise the services to the most vulnerable and fight hard to protect people from the impact of cuts and benefit changes.”

Social care for the elderly and children would remain a priority he added.

The Labour group also approved a two per cent council tax rise – or £23 a year for the average household.

But the opposition parties chose cuts to refuse collection and pothole repairs with which to target their attacks.

Conservative deputy leader Coun Robert Alden (Erdington) said: “This budget will leave us with more litter on the streets, more holes in our roads and less libraries and leisure centres for our citizens to use.”

Instead he proposed a £10 million saving on the council’s £1 billion procurement spending and the acceptance of a £3.3 million Government grant to freeze council tax.

The Lib Dems proposed a similar package saying that money could be used from council reserves of £223 million, and by cutting the roll out of wheelie bins.

Lib Dem leader Coun Paul Tilsley (Sheldon) said: “We would freeze council tax, restore green waste collections and restore funding for district committees.”

The City Council’s annual showpiece meeting, the first attended by new council chief executive Mark Rogers since taking up the role, was twice interrupted by anti-cuts protesters calling for a deficit budget from the Labour leadership.

Godfrey Webster of Birmingham Against the Cuts said: “Birmingham can’t afford to make these cuts. They will impact on the most vulnerable in society – children’s homes closed, libraries closed, neighbourhood offices closed. The council should refuse to set a budget on the Government’s terms.”