Birmingham City Council is splashing £283million on staff pensions while axing £300m from public service, following its effective bankruptcy declaration just 18 months ago.
The council's pension schemes is one of Britain's most expensive, providing officials with guaranteed, inflation-linked income for life upon retirement.
The combination of service reductions along with pension benefits comes as the local authority implements a savage programme of cuts that began in 2024-25, slashing £149m from spending.
During that same period, council staff received pension contributions of approximately £142m – nearly enough to cover the entire shortfall.
Birmingham City Council is splashing £283million on staff pensions
PA
The council's pension scheme consumes approximately one in every three pounds collected through council tax receipts, making it one of the most expensive in the country.
Local residents are facing a 7.5 per cent increase in council tax bills this year, adding £134 to the cost for an average home.
The tax hike comes at a time when Birmingham residents are receiving reduced services for their contribution - despite the council receiving a £150m funding boost from central Government.
The impact of cuts is being felt across Birmingham's public services - with rubbish collection now reduced to fortnightly across the city, while adult social care centres are closing as part of the council's cost-saving measures.
Youth services have been pared back, as arts funding has been slashed across the city.
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Even basic amenities are affected, with the council cutting £50,000 from library book budgets and another £50,000 is being removed from the budget for dropped kerbs.
The cuts are part of a wider programme of service reductions that has left residents paying more for diminished services.
The council's cost-cutting measures are affecting almost every area of public life, while the pension scheme remains protected.
Darwin Friend, of the TaxPayers' Alliance campaign group, said: "Taxpayers are sick of coughing up huge sums to support overly generous pension schemes for public sector workers."
He added: "While residents face huge rate rises, millions of pounds are being diverted from frontline services to the golden nest eggs of council officials."
Rubbish collections are now reduced to fortnightly across the city (Stock)
PA
"Rather than cutting services to fund these schemes, they should be closed to new entrants and the benefits brought into line with those available to the private sector workers who pay for them."
A Birmingham City Council spokesman said: “The council has been in ongoing dialogue with West Midlands Pension Fund since September 2024.
"A review of the council’s contributions is due to commence in March 2025. The review will look into future contributions rather than withdrawals from the fund.
“This is a complex process and will take several months. Any impact will be factored into the council’s budget setting process in 2026-27.”
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