Council tax bills in Birmingham will continue to rise only 1.9 per cent a year until at least 2018 despite the recession, leaders of the city’s Conservative-Liberal Democrat coalition have pledged.
An aggressive cost-cutting programme aimed at eliminating waste will continue for a decade.
Papers for the 2009/10 budget show adults in Birmingham have benefited by almost £100 a year since 2005, when the coalition began its policy of below-inflation 1.9 per cent council tax increases.
Compared with the average rise in England, every council tax payer in Birmingham is £88 a year better off.
The saving will increase as Birmingham moves to a position where it can boast the lowest council tax bills of any major UK city, according to council leader Mike Whitby.
The coalition’s strategy is underpinned by a two-pronged efficiency programme. A business transformation project, based on overhauling IT and scrapping restrictive practices among the workforce, will produce savings of £1.5billion over 10 years.
Departments are under orders to find efficiency savings of £22.8million this year rising to £38.3million by 2011/12. These savings are to be found through “slimmer, flatter management structures, controlling staff costs more tightly, changing business processes and improving output and efficiency”, according to the cabinet papers.
A sharp downturn in the property market forced the council to cut estimates of the amount of money it expects to make from selling land and buildings over three years.
Borrowing is likely to rise almost £500million in 2009/10. The document hints at fears by opposition Labour councillors the efficiency and business transformation programme will result in the loss of hundreds, possibly thousands, of jobs. Council leaders hope to avoid redundancies by encouraging staff in threatened posts to switch jobs internally.
The adults and communities department, formerly social services, is in danger of exceeding budget by £11million, but must still find £6million savings, rising to £11million by 2011/12.
Writing in the foreword to this year’s budget document, Coun Whitby and deputy council leader Paul Tilsley described the delivery of savings as “critical” to the future of Birmingham.