Key findings
- Nottingham and Birmingham city councils have both issued Section 114 notices, an effective declaration of bankruptcy.[1],[2]
- Nottingham city council is forecast to have an overspend of £23 million in the financial year 2023-24.[3] Birmingham city council has a budget shortfall of £87 million in 2023-24.[4]
- Recent Section 114 notices have resulted in the government increasing the limit which council tax can rise by before a referendum is required for those councils. Croydon council were able to raise their council tax by up to 15 per cent in 2023-24, while Thurrock and Slough councils were able to increase their council tax by up to ten per cent in 2023-24.[5]
- The average band D council tax for Nottingham city council in 2023-24 was £2,412.[6] If council tax were to increase by the normal maximum level of 4.99 per cent without holding a referendum,[7] it would increase the average band D council tax by £120.
- If council tax for Nottingham city council were to rise by 9.99 per cent it would increase the average band D council tax by £241.
- If council tax for Nottingham city council were to rise by 14.99 per cent it would increase the average band D council tax by £362.
- The average band D council tax for Birmingham city council in 2023-24 was £1,906. If council tax were to increase by 4.99 per cent it would increase the average band D council tax by £95.
- If council tax for Birmingham city council were to rise by 9.99 per cent it would increase the average band D council tax by £190.
- If council tax for Birmingham city council were to rise by 14.99 per cent it would increase the average band D council tax by £286.
READ THE BRIEFING NOTE
[1] Bevis, G & Zagnat, O. Nottingham City Council declares itself 'bankrupt', BBC News, 29 November 2023, www.bbc.co.uk/news/uk-england-nottinghamshire-67380096, (accessed 30 November 2023).
[2] Madden, S. What is happening in 'bankrupt' Birmingham?, BBC News, 8 September 2023, www.bbc.co.uk/news/uk-england-birmingham-66730165, (accessed 30 November 2023).
[3] Bevis, G & Zagnat, O. Nottingham City Council declares itself 'bankrupt', BBC News, 29 November 2023, www.bbc.co.uk/news/uk-england-nottinghamshire-67380096, (accessed 30 November 2023).
[4] Madde, S. ‘Bankrupt’ Brimingham City Council approves finance plan, BBC News, 25 September 2023, www.bbc.co.uk/news/uk-england-birmingham-66914455, (accessed 1 December 2023).
[5] Department for Levelling Up, Housing and Communities, Council Tax levels sety by local authorities in England 2023 to 2024 (revised), 19 May 2023, www.gov.uk/government/statistics/council-tax-levels-set-by-local-authorities-in-england-2023-to-2024/council-tax-levels-set-by-local-authorities-in-england-2023-to-2024, (accessed 30 November 2023).
[6] Nottingham City Council, Bands and Charges, www.nottinghamcity.gov.uk/information-for-residents/council-tax/general-information-about-your-council-tax/bands-and-charges/, (accessed 30 November 2023).
[7] Department for Levelling Up, Housing and Communities, Council Tax levels sety by local authorities in England 2023 to 2024 (revised), 19 May 2023, www.gov.uk/government/statistics/council-tax-levels-set-by-local-authorities-in-england-2023-to-2024/council-tax-levels-set-by-local-authorities-in-england-2023-to-2024, (accessed 30 November 2023).