Birmingham ‘out of bankruptcy’

Public services
Author

Laurence

Published

February 12, 2026

Birmingham ‘back in surplus’

There’s important news for the city’s finances and the funding of public services.

Birmingham is officially out of Section 114 status - the local government equivalent of bankruptcy.

A surplus budget is due to be voted on later this month. This will start the work of rebuilding essential services cut back under years of austerity.

Fair funding for Birmingham

This is possible because Labour is allocating Birmingham funding that reflects levels of deprivation for the first time since 2010. The Council’s ‘core spending power’ is due to increase by 45 per cent over the next three years.

It worth remembering the extent of the austerity inflicted upon Birmingham:

  • The Conservative and Lib Dem Government said it was ‘delighted’ to cut Birmingham’s Budget by 12 per cent, back in 2010

  • 40p in the pound was lost for every Brummie

  • Birmingham had the worst funding cuts of any metropolitan authority in England

Meanwhile, Reform-led Worcestershire ‘faces effective bankruptcy’ and is set to impose the largest council tax increase in the country.

Lessons for the future

Of course, Birmingham’s problems did not all lie outside the city. Whatever happens in the local elections this year, a better and more professional culture is needed compared to what has prevailed in the past.

While we managed to keep some essential services going. Good examples libraries and youth services, which can now be rebuilt.

But other services are gone for good. The Guardian reported this week on the Fairway Day Centre in Kings Norton, which is boarded up and awaiting redevelopment.

Birmingham remains under central government intervention. I’ve been critical about some of the ways that the intervention has been run, which includes the former Lead Commissioner’s decision to block a ‘call in’ of the decision to close the Fairway.

It’s important now that a clear set of targets for improving services is set, so that the Council’s performance can be measured objectively, and the intervention can come to end.