As Birmingham prepares for an all-out City Council election in May 2026, the past two years have been unprecedented and turbulent for the city’s administration.
In September 2023, the Labour-led council declared itself effectively bankrupt, unveiling a severe financial crisis that sent shockwaves through the city. What followed was a difficult period marked by sweeping cuts to local services alongside significant council tax increases.
This instability persisted in 2025 with another grueling budget, Labour party resignations, and an ongoing bins strike—all capturing national attention and deepening the council’s struggles.
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The council’s financial woes have been driven by a mixture of factors, including an equal pay dispute, flawed budgeting practices, increasing demand for services, and a botched IT system rollout. Labour councillors have also attributed part of the crisis to funding cuts imposed by the previous Conservative government. This political blame game is expected to dominate discourse in the lead-up to the upcoming elections, which will determine the future leadership of Birmingham’s crisis-hit council.
Here are five defining moments from the past year—and why 2026 may bring renewed hope:
1. The Prolonged Bins Strike
The 2025 bins strike became a symbol of the council’s challenges, leading to widespread rubbish piling up across Birmingham neighborhoods. Scenes of ‘megapickets’ at waste depots, unusual rodent sightings, heated council meetings, parliamentary questions, and even a man in a giant rat costume underscored the strike’s impact.
Originating from a dispute over the abolition of the Waste Recycling and Collection Officer role, the strike saw trade union Unite demanding better pay and conditions. The council claimed to have offered “fair and reasonable” terms but has refused to compromise on equal pay ‘red lines.’ Efforts to offer alternative jobs and compulsory redundancies have so far failed to end the strike, with Unite vowing it may continue beyond May’s election.
2. The Grim 2025 Budget
Birmingham Council’s second post-bankruptcy budget brought more pain for residents. Proposed cuts targeted waste collection, libraries, parks, street lighting, cultural services, and adult social care day centres, aiming to save around £150 million. Alongside cuts, council tax rates increased further, and fees for many services rose sharply.
Critics slammed the “double whammy” of higher taxes coupled with fewer services. Council leader John Cotton defended the package, promising detailed delivery plans and highlighting progress made in the council’s financial recovery.
3. Labour Resignations and Lost Control
The ruling Labour group’s grip on power weakened dramatically in 2025 amid several resignations, defections, and absences. In November, a crucial vote on council committee representation ended in a tie between Labour and opposition members. The Lord Mayor, a Labour councillor, followed convention and voted to maintain the status quo, but Labour nonetheless lost the vote—a symbolic blow cheered by opposition parties.
Union leaders declared Labour had “lost its grip on power,” pointing to the impact of councillor resignations and electoral defeats. Despite this, John Cotton reaffirmed Labour’s focus on governing Birmingham and expressed confidence in winning back control in the 2026 elections.
4. The Flag Controversy
A heated debate erupted over the appearance of England and Union flags across Birmingham suburbs. Supported by groups framing it as patriotic celebration, the campaign faced criticism from anti-racism advocates who accused it of stoking division and political discord.
The issue reached council discussions, with Conservative councillors waving Union Jacks and Labour cabinet member Jamie Tennant acknowledging the council’s policy to address attachments to lampposts. The flags debate highlighted ongoing tensions over identity and community cohesion in the city.
5. Regeneration and Community Concerns
Birmingham’s major regeneration projects continued to spark both hope and unease. The approval of the Druids Heath estate regeneration—set to deliver 3,500 new homes and improved infrastructure—was welcomed for its vision but raised fears about displacement and affordability for existing residents.
The council acknowledged these concerns and committed to a shared equity scheme to help protect homeowners from being priced out, pledging ongoing community engagement around the project.
Amid these challenges, Birmingham also celebrated major positives in 2025. The unveiling of ambitious plans for a new 62,000-seat stadium and Sports Quarter by Birmingham City FC promises significant economic and cultural boosts. The city also secured hosting rights for prestigious events like the European Athletics Championships, Invictus Games, and will serve as a venue for the 2028 Euros and the 2035 Women’s Football World Cup bid.
Birmingham’s growing status as a filming hub—highlighted by new series of BBC’s Peaky Blinders—adds to its cultural renaissance.
Government-appointed commissioners recognized ongoing difficulties but noted progress and “improved performance in some areas.” Council leader John Cotton declared the council had “turned a corner” but remained focused on further improvements.
Looking ahead, the council’s 2026-27 budget gap has shrunk dramatically, from £83 million to just £1.7 million, with similar reductions projected for 2027-28. While risks remain and savings must be delivered, these signs offer cautious optimism that Birmingham’s council and city can overcome recent hardships and build a fairer, more resilient future for all its residents.