A public consultation has opened inviting people living in Manchester to give their views on the Council’s approach to setting its budget for 2022/23.
It will run at www.manchester.gov.uk/budget until 8 February and the views of Manchester people will feed into the decision-making process as the budget – including the Council’s element of Council Tax – is set for the next year.
Following the Council’s local government funding settlement in mid-December we now have more clarity on our funding for next year, which is not as bad as expected and includes one-off funding to help address pressures.
This means that no savings will be required to balance the budget for 2022/23 beyond the £7.8 m of efficiencies – for instance through revising the way we budget for staff costs to reflect naturally occurring vacancy levels – already identified and reported to the Resources and Governance Scrutiny Committee in November 2021.
However, beyond 2022/23, the picture gets much more challenging. Although, for the fourth year running, the Council has only received details of its funding for a single year – which makes long-term planning difficult – the Government’s three year spending review indicated the overall amount of funding which will be available to local government for the following two years. The one-off funding is concentrated in 2022/23 and funding for 2023/24 and 2024/25 does not allow for inflation and growth in population and demand for services. Based on this, and using some of the one-off funding to smooth future shortfalls, we anticipate a £37m funding shortfall in 2023/24, rising to £58m in 2024/25.
Work to develop proposed savings of £40m per year for 2023/24 and 2024/25 - equivalent to around eight per cent of service budgets – will also be brought forward this year. This is not part of the budget setting process for 2022/23 but decisions taken this year will have ongoing impacts which affect future budgets.
Considerable budget pressures remain as the city continues to emerge from the impacts of Covid-19 and address deep-rooted inequalities, many of which have been exacerbated during the pandemic period.
These come on top of the impacts of austerity, which have hit more deprived areas such as Manchester - with greater demands on council services - the hardest. If between 2010/11 and 2021/22 Manchester had received even the average level of funding reduction for councils we would be £85 million a year better off.
The Government settlement assumes that Councils will raise their core element of Council Tax by the maximum 1.99 per cent allowed without triggering a referendum, and also levy the full 1% adult social care precept allowed to support care costs.
Councillor Bev Craig Leader of Manchester City Council, said: “Manchester has experienced unfair cuts to our Government funding since 2010 which have made successive budgets difficult. If Manchester had only received the ‘average cut’ to local authority budgets then we would be £85million better off every year. Despite these, we have been determined to do the best we can for Manchester people.
“Previous consultations with Manchester residents told us your priorities – supporting the city through Covid and planning our recovery, looking after vulnerable children and adults, maintaining and improving our neighbourhoods, investing in social and affordable housing and becoming a zero carbon city. This year’s budget will continue to do this.
“While the budget position for the coming year is not the most painful we have faced in recent times, setting the budget remains a tricky balancing act which will become more challenging again in the years to come.
“Insufficient Government funding means that to protect key services and ensure they can meet demand we have to consider raising our part of the Council Tax by 1.99 per cent and charging a one per cent adult social care precept.
“This would enable us to deliver a poverty-proofing budget which will support services which help Manchester people to improve their circumstances, tackle inequalities and protect the most vulnerable while still delivering the routine services that people expect. Not taking these increases would mean that cuts to services would be required.
“We want to be straight with people about the decisions we face. Their views will help shape those decisions.”
The proposed budget for 2022/23 will be considered by the Council’s Executive on 16 February and the Resources and Governance Scrutiny Committee on 28 February before the final budget setting meeting on 4 March. Public consultation on the Council’s approach to this year’s budget will begin on 11 January and run until 8 February.