Manchester City Council

Budget proposals for 2017-20 announced

Manchester City Council has published details of its budget proposals for the next three years and is inviting people in the city to have their say on them.

Back in October we published budget options for 2017/18 to 2019/20, identifying a range of possible savings to help address a budget gap caused by reduced government funding, an increasing population, inflation and other unfunded pressures.

This comes on top of continuing cuts since 2010/11 which have seen directorate budgets reduced by almost a third and £271m of savings and budget reductions made. In the same time, the Council’s workforce has reduced by 38% from 10,444 full time equivalent to 6,452 fte.

When the options were produced in autumn, the Council was anticipating a budget shortfall of between £40 and £75m over the next three years. Although the government’s financial settlement actually left the Council £1.2m worse off than anticipated, a review of resources available to support the budget has enabled the budget gap to be closed to £30m. This has included extra revenue generated through the city’s growth including £8.374m additional dividend from the Council’s share in the ownership of Manchester Airport Group and the use of £6.76m of airport dividend, which had previously been earmarked for capital investment, to help reduce the service savings required.

Now - following a consultation on those options which garnered more than 1,700 responses and taking into account the latest financial position – these options have been shaped up into firmer proposals.

Alongside the service budget proposals, there are also proposals for major capital investment in priorities including improving roads. 

Council Tax 
Since the options were published, the Government has changed the rules to allow Councils to increase Council Tax by slightly more in the next two years to help pay for the increasing demand for services for older people and vulnerable adults. 

The Council proposes to add the allowed three per cent adult social care precept in 2017/18 and 2018/19. This will raise £8.8m.

But as the Council proposes to put £30m extra funding into adult social care over the next three years to try to keep pace with growing demands, the money raised will only address a small proportion of the pressures.

In addition, Councils are allowed to raise Council Tax a further 1.99 per cent every year to support services. This will raise another £8.5m. 

This will cover a permanent £2m a year increase in the highways budget with the rest more than absorbed by the Government’s new apprenticeship levy, which will cost the Council around £900,000 a year. 

It is proposed that Council Tax will increase by a total of 4.99 per cent in 2017/18 and 2018/19 and 1.99 per cent in 2019/20. If we did not proceed with Council Tax rises, we would have to find £17.3m more savings.

Even after these changes, Manchester’s average Council Tax bill will be one of the lowest in country. The increase for Band A properties, which make up the largest proportion of properties in Manchester, would be around 77p a week in 2017/18.

Proposals 

The proposals take into account feedback from the options consultation which showed that respondent’s priorities were ‘frontline’ services for vulnerable adults, children and schools and roads and cleaner neighbourhoods as well as services to support skills and employment. Generally cuts perceived as ‘back office’ efficiencies were supported with the strongest disagreement for options seen as affecting vulnerable people or neighbourhood-based services. 

Care has also been taken to ensure the proposals fit with the priorities set out in the Our Manchester strategy for the city with an emphasis on working with people and communities and early intervention to prevent problems growing and becoming more expensive to tackle. 

To reflect this some options have been taken off the table altogether while some others have been changed.

Examples of options it is now proposed are REJECTED include:

Saving £800,000 by streamlining youth and play services funded by the Council

Saving £605,000 by reducing emergency grants to the most vulnerable

An option to make savings of £500,000 by reducing targeted support for parenting and speech and language therapy for early years children

An option to save £500,000 through changes to the health visiting service as part of the ongoing reform of early years provision has also been rejected

Saving £100,000 from the budget for short break for the parents and carers of children with disabilities.

Saving £474,000 by reducing staffing in neighbourhood teams which help support neighbourhoods and communities

Saving £100,000 by reducing funding for parks and leisure events

Saving £25,000 by reducing proactive prosecutions for matters such as flytipping and blue badge fraud

Reducing Neighbourhood Investment Funding to each of Manchester’s 32 wards from £20,000 to £10,000 a year. 

Proposals 

The remaining proposals total £31.75m of savings. A comprehensive list can be found at www.manchester.gov.uk/budget

Examples of proposals that have CHANGED include:

Savings expected to be delivered through the Locality Plan, a vision for integrated health and social care to support a healthier city, have been reduced from £27m to £12m over the three year period. The Council contributes to a combined health and social care budget with the Clinical Commissioning Groups (CCGs) so will share in savings across the system through an emphasis on prevention and support – which means people can access care closer to home, reducing the need for costly hospital or residential/nursing provision – and integrated commissioning of services. Given the national crisis in social care funding, the lack of extra resource and the need to support people to become more independent over time, the higher savings figure was not considered achievable in the current context.

School crossing patrols – the original option had been to save up to £550,000 through the removal of school crossing patrols following investment in safety improvements. This has been reduced to a £220,000 saving in 2018/19 following a doubling of capital investment aimed at making all crossings safer. The existing policy of maintaining all crossings rated as either ‘red’ or ‘amber’ for risk will be maintained.

The level of savings to be achieved through changes to the Council Tax Support scheme for the most in-need residents has been halved, from £2 million to £1 million. This recognises the potential extra burden on the poorest residents of the increased Council Tax rise. The original preferred option was that there would be a maximum reduction to bills of 80 per cent, meaning all working age residents would have to pay at least 20 per cent. But it is now proposed to go ahead with the alternative option of a maximum 82.5 per cent reduction, meaning the most in-need residents will pay 17.5 per cent instead. Council Tax Support was previously nationally funded, meaning that richer areas supported poorer ones, but the burden has been shifted to Council Taxpayers in recent years. As many Council Taxpayers only narrowly miss out on being eligible for the support scheme and are just about managing the impact of the very badly off being subsidised by the only marginally better off has also had to be taken into consideration. 

While the budget of the work and skills team will be reduced by £239,000 a proposed further option to save £301,000 by reducing its staffing levels has been shelved. 

The areas covered by the savings proposals are:

Adult Social Care: 

Adult Services, working closely with health, provide vital services to support older people and adults with disabilities and mental health problems. The Council currently spends £157.69m a year on these services – by far its largest spending area. As explained above no service reduction options have been identified but it is anticipated that there will be £12 million of efficiencies through the Locality Plan over the three years. 

Children’s Services:

Children’s services are responsible for helping children, young people and their families to be safe, healthy and successful. The Council currently spends £102.21m a year on these services. The budget includes significant investment in services for Looked After Children. 

It is proposed to make savings of £2.898m in 2017-20, with the largest part of this, £1.019m, to be achieved in 2019/20 through safely reducing the number of children in care through more intensive early intervention and support, and efficiencies in adoption and fostering. Some £886,000 of savings are also proposed through commissioning efficiencies.

But rather than being added to the Council’s overall savings figure, this £2.898m will be reinvested in full in supporting social worker capacity and other services to help prevent children needing to go into care or safely move them out of the care system more quickly. 

Corporate Core

The Corporate Core provides strategic leadership for the Council and city and supports the rest of the organisation through services such as customer services, revenues and benefits, human resources, ICT, finance, legal and communications. It also includes the highways department.

Some £10.56m of savings are proposed in this area. These are to be achieved mainly through efficiencies and include £2m through continuing improvements in Council Tax collection rates.

Streamlining human resources policies to reduce employment costs could save around £3m over the three year period. Any proposals will be subject to consultation with staff and trade unions and their ideas are being invited.

Growth and Neighbourhoods 

Growth and Neighbourhoods deliver the services that keep the city clean, green and safe, manage local services and help drive growth. The Council currently spends £72.94m a year on these services.

Original budget options of £9.44m have been reduced by more than £2m to proposals for £7.22m of savings in recognition of the high priority attached to these services by residents. 

Major savings include an estimated £3m benefit by 2019/20 through Manchester’s share of efficiencies in Greater Manchester-wide waste disposal arrangements.

The ongoing impact of bin changes which have already taken place on reducing the amount of leftover waste and increasing recycling is expected to deliver a further saving of £1.3m in 2017/18 with a further £900,000 if recycling rates increase in line with neighbouring authorities who have made similar changes.

But there are still difficult decisions to be taken, such as a review of the operating models for Wythenshawe and Harpurhey Markets to save £150,000 and a reduction in the number of bowling greens maintained by the Council’s grounds maintenance team, although the savings required have been reduced by £75,000 to £100,000 and will only take place in consultation with users. 

Strategic Development

The Strategic Development Directorate supports the city’s growth – securing investment and helping to create jobs, as well as overseeing the city’s plans for housing and managing the Council’s land and property assets. The Council currently spends £6.21m a year on this service. 

Some £250,000 of savings are proposed through the refurbishment of old Hulme Library and the disposal of Claremont Resource Centre. 

Capital Investment
In tandem with setting ongoing service budgets, the Council has developed a capital investment strategy to ensure its one-off investments have the maximum positive impact. 

As part of this it is proposed to make more than £100m investment in improving roads and pavements by 2020 to bring them all up to a ‘good’ standard and keep them at this standard. Other major capital investments include the world-class Factory arts venue, improvements to parks and open spaces and the modernisation of Abraham Moss Leisure Centre. 

Sir Richard Leese, Leader of Manchester City Council, said: “The last few years have been very challenging for the Council as we have had to deal with continuing cuts at the same time as increasing pressures on services. This has been exacerbated by unfair government funding settlements which have hit big cities such as Manchester the hardest.

“But we remain determined to do all we can, working with Manchester people and other partners, to continue to protect the vulnerable and give everyone the opportunity to share in the success of the city’s growing economy.

“This budget process underlines this partnership approach as we attempt to strike the right balance which, inevitably, still involves some difficult decisions.” 

Councillor John Flanagan, Executive Member for Finance, said: “Getting to this point has been a long and careful process because we want to involve the public as much as possible at every step. Between July and September last year Manchester people told us their priorities, which helped officers come up with their initial options in October. The consultation feedback on those options has in turn shaped the proposals. Now, as a final stage, we are putting these proposals to the public for their views.

“Manchester people have played a valuable role in shaping the budget so far. We’re grateful to them for their time so far and would welcome further input on the proposed budget.” 

What happens next?

The next stage of consultation on the budget 2017-20 now begins, asking people to comment on whether they agree or disagree with the detailed proposals. For more information and to take part, visit www.manchester.gov.uk/budget The consultation runs until 10 February. 

The final budget for 2017/18 to 2019/20, taking into account the responses to this consultation, will be set at the full Council meeting on Friday 3 March 2017.

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