It has now been 2 years since Birmingham City Council effectively declared bankruptcy in September 2023. Since then the Council continues to have a budget that does not balance and an asset sales programme targeting £750m, including the disposal of library buildings, public open space and other assets with cultural or heritage value.
Councillor Robert Alden (Con, Erdington), Leader of the Opposition on Birmingham City Council, has today written to the Chancellor of the Exchequer, Rachel Reeves, calling for the Government to effectively refinance Birmingham City Council’s Debt by scrapping or reducing interest rates on the council’s Public Works Loan Board debt.
This would alleviate the severe financial pressures facing the council, making debt repayment affordable while safeguarding essential services for residents. Cllr Alden has highlighted the forecast £4bn loan debt by 2028, and £277m a year treasury management costs to service this. For context the Council overspend in 2024/25 was £182m.
Cllr Alden stressed that Birmingham’s residents are paying the price for the Labour administration’s mistakes and failure to act. That is why we are making this proposal. “The council’s woes are a direct result of Labour’s mismanagement, and the Government can act to prevent the continued sale of public assets and stripping of services by helping Birmingham City Council effectively refinance its debt.” he said.
Cllr Alden added “the Labour administration here in Birmingham have failed to fix the Council’s budget. As the Opposition we are stepping up to offer the Government a solution that would enable the Council to get back on its feet, clean up the city and give residents a fresh start, unleashing Birmingham’s full potential”.
