Birmingham City Council has announced that £50m in cuts need to be made next year - as leader Ian Ward rejected the Prime Minsiter's claim that austerity is coming to an end.
The authority has today (Tuesday) revealed its 2019/20 budget proposals will include a huge 4.99 per cent council tax increase, more than 120 council job losses and £18m of 'new cuts'.
But crucially the council will use no reserves to balance its books next year following severe criticism and a formal warning from auditors after it burned through more than £116m in the last two years, and will plunder the rainy day fund to the tune of at least another £30m this year.
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Councillor Ward (Lab, Shard End) said: "Although the Prime Minister has claimed austerity is over, it is not over from a local government perspective, certainly not from the numbers we are presenting.
"This is still the most challenging period in Birmingham City Council's history."
What will the council tax rise mean for you?
The proposal means residents living in Band D properties in Birmingham could likely pay around £65 more per year to the council - and that does not include precepts for other services such as police and fire and rescue service.
The details of the latest budget, which goes out to public consultation on Tuesday (November 13), will be pored over in the coming days and weeks.
Cllr Ward said by the end of the year the council will have lost £690m of its funding since 2010.
Up to £86m needs to be slashed over the next four years including £50m in 19/20.
That figure includes £32m of cuts previously announced and £18m of new savings proposals.
Also, since 2010 the workforce has shrunk from around 25,000 staff to 10,000.
The job cuts figure quoted for 2019/20 and beyond was 122 rising to 204.
'Many residents will be affected'
Cllr Ward paid tribute to employees who have 'kept the council going' in recent years.
He also stated he was 'under no illusions' that many residents will be affected by the detail in the budget proposals but vowed to listen to the feedback pointing out that the council tax increase was reduced last year following the consultation.
The 4.99 per cent increase for 19/20 is the maximum rise allowed before triggering a referendum and also includes a two per cent social care precept.
Cllr Ward declared that the budget would 'take the council in the direction' of the 'culture change' required by the authority to actually deliver on its savings proposals - the budget for the current financial year is forecast to be £12.9m overspent after just six months.
But the leader reassured Birmingham is 'not in the same position' as Northamptonshire County Council which notoriously ran out of money and had new spending blocked.
He added: "With the Prime Minister saying austerity is at an end what I think she now needs to do is demonstrate that austerity is at an end for local government because there is no sign of that at the moment.
"It is our absolute determination that we deliver value for money.
"It's interesting that back in 2010 all the polling was indicating that people actually supported the idea of making spending cuts in order to balance the nation's budget, that's flipped over now.
"People have become tired of this ongoing period of austerity and people want to see a different solution in the future and that means bringing an end to the cuts."