Cash-strapped Birmingham City Council could raise council tax by 10% if the Government gives its finance plan the go-ahead.

The council has asked for a special dispensation to raise taxes by 10% for the next two years – adding an additional £400 a year on a Band D property by April 2025.

Councils must hold a referendum for council tax increases above the Government cap – which is currently 4.99%. However, the city is now in negotiations with ministers over a potential dispensation to deal with its extreme financial woes.