A consultation has opened on Manchester City Council’s budget for the next financial year, from 1 April 2023 to 31 March.
The Council is inviting the views of residents to help shape decisions which need to be taken around savings and Council Tax increases. People who live in Manchester can visit www.manchester.gov.uk/budget to take part and find out more.
The predicted position
In common with local authorities across the country, the Council is facing a shortfall between the amount of money required to run services and the amount of money available. This is forecast at £28million in 2023/24, rising to £96million by 2025/26.
Huge inflation pressures have meant rising costs across the board – leaving our expected inflation and utilities costs over the next two years alone £42million higher than reasonably anticipated.
The Council’s commercial income has also been badly hit by the lingering impacts of the Covid pandemic.
Despite lobbying, we are not expecting any more funding from the government to help with these unprecedented impacts and the wider economic backdrop remains volatile.
This comes on top of more than a decade of cuts in our central government funding, in which Manchester has been one of the hardest hit places in the country.
The forecast budget position is based on a proposed council tax increase of 1.99% - to invest in services to support residents through the cost-of-living crisis and deliver on residents' priorities - and 1% precept to support adult social care. This is still considerably below inflation and would be a much lower increase than for other household bills.
We are concerned about the cost-of-living crisis affecting residents, which is why we unveiled an £8million support package for residents this year and plan to invest an extra £3.5m in targeted anti-poverty measures in next year’s budget. However, the desire to minimise council tax increases has to be balanced against the need to fund essential services which support Manchester people, especially those who are struggling the most.
In short, the less council tax goes up, the more cuts will have to be found on top of the savings already being put forward. Manchester people on the lowest incomes get help through our Council Tax Support scheme.
Making the most of what we’ve got
For all these challenges, we have been continuing to deliver on what residents told us were their priorities. This includes overseeing the creation of 1,000 affordable homes a year and tackling homelessness, promoting a healthier and happier city, tackling inequalities and creating vibrant neighbourhoods where people want to live – all while leading the drive towards becoming a net zero carbon city by 2038 or earlier.
We are also focused on getting the basics right – from emptying bins to maintaining parks, libraries, leisure facilities and roads, while improving options for walking and cycling.
Sound financial management has left us in better shape than some local authorities but we are still having to make significant cuts.
It is planned to use around £16m a year of our reserves – which cannot be used simply to plug the funding gap - to smooth the impacts of savings by providing temporary support to enable longer-term savings to be delivered. The scale of savings being proposed over the next three years – relative to the size of our revenue budget (c.£690million a year) - is not as large as elsewhere.
However, a budget gap of £37m remains for 2024/25 and work is starting on the difficult decisions we are going to need to make for the budget in that year.
Officers have so far identified a range of proposed savings totalling £42.3million over the next three years, 2023/24 to 2025/26. Further savings, which will be the subject of future consultation, will need to be brought forward to address the full shortfall.
As far as possible, these are designed to protect the delivery of council priorities and consist mostly of efficiency savings and income-generation measures, with service reductions only as a last resort. Further details of proposed savings can be found at www.manchester.gov.uk/budget
The consultation runs until 7 January 2023.
Councillor Rabnawaz Akbar, Executive Member for Finance, said:
“Every budget since 2010 has been a difficult balancing act and this one is no different. We have to ensure we are delivering on Manchester people’s priorities and supporting those who are most vulnerable while coping with reduced Government funding and increasing pressures such as inflation which the funding we receive has not kept pace with. We are also very conscious of the cost of living crisis and providing the right targeted support to those who are struggling the most.
“People’s views and a refreshed understanding of their priorities will help us ensure we get that balance right.”
Council Leader Cllr Bev Craig said:
"Over the last 12 years we have had to make £428m of savings to cope with Government funding cuts and unavoidable cost pressures such as inflation and a growing population. Even if we'd had only the average council funding cut we would be £77m a year better off. Despite this we have prioritised the services which Manchester people have told us are the most important.
"Long term planning and this clear focus on residents' priorities has enabled us to navigate our way through successive challenging budgets while still moving the city forwards and protecting the most vulnerable. The latest budget will be no exception.”