Council to set balanced budget despite challenges

  • Friday 2 February 2024

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Manchester City Council’s Executive will consider budget proposals for 2024/25 when it meets on Wednesday 14 February.

The financial pressures facing the whole local government sector have been well-documented with the local government sector as a whole facing a £4 billion funding gap and some councils declaring that they are not in a position to set balanced budgets. 

This comes on top of 14 years of austerity which have undermined councils’ financial resilience. Over that period, Government funding cuts and unfunded pressures such as inflation and population growth have left the Council having to make £443m of savings. 

Councils nationally are under unrelenting financial pressure as funding fails to keep pace with rising costs and demand for care services. The Local Government Association has highlighted children’s social care costs, the rising demand and costs of homelessness, rising demand for adult social care alongside an increasingly fragile social care market and increasing demand for home-to-school transport costs for children with Special Educational Needs, as areas where increases are particularly marked nationwide. 

Manchester City Council is also facing these pressures, which have grown in recent months and been compounded by a disappointing Government finance settlement. 

However, the Council is still in a position to set a balanced budget which supports its priorities. 

At the start of the budget process the Council was facing a £26 million budget shortfall for 2024/25. But the gap has been closed through £11.2m of proposed savings and a further £15m of measures which relate to extra income or deferred spending.

This is in addition to a £36.2m package of savings for 2023/24-2025/26 agreed last year and the use of around £17m reserves a year over that period to ease impacts. 

Council Leader Cllr Bev Craig said:

“While the Council’s budget is under pressure we know that times are hard for many Manchester residents too. That’s why we remain focused on our long-term plans to address hardship and inequality – helping people in the city to become healthier and to access the skills and opportunities which will help them to share in the city’s wider success story.  

“We will also continue to do all we can to support the city’s most vulnerable people: Protecting children, supporting older people and those with learning disabilities and helping those at risk of or experiencing homelessness. 

“At the same time, we are still committed to providing good quality services for all – whether it’s emptying the bins, maintaining the roads or running parks, libraries and leisure centres – and investing in all of our neighbourhoods. 

“Our priorities are clear and we are sticking to our strategies.”  

Cllr Rabnawaz Akbar, Executive Member for Finance, said:

“We are not complacent but while our financial position is challenging we are in a better position than many other councils.  

“This has only been possible due to careful long-term planning which has involved taking tough decisions early, managing demand for the most expensive care services through earlier help and preventative work, the prudent use of our reserves and prioritising investment on the things which matter most to Manchester people.” 


The Government’s funding settlement calculations assume that local authorities, such as Manchester City Council, which have social care responsibilities will increase Council Tax by the maximum amount allowed without the requirement for a local referendum – 4.99%, consisting of a 2.99% general increase plus a 2% precept to support adult social care costs. This 4.99% increase is being proposed. 

Beyond 2024/25, the Council’s financial position is expected to become even more challenging. The projected budget gap for 25/26 is £29m, increasing to £41m in 2026/27. There will be difficult decisions required to address this position unless further Government funding support is forthcoming. 

The final budget for 2024/25 will be set at the Council meeting on Friday 1 March, after being considered at a series of scrutiny meetings in February. 


The £11.2m of savings and extra income from 2024/25 onwards has been designed to try  to protect front line services. Measures included:  

  • £5.4m of Adult Social Care savings through various initiatives to provide support to help people remain independent and prevent them needing residential care or expensive homecare packages. It is also expected that an uplift in care fees will mean the Council no longer has to pay top-up fees to secure supply, saving an estimated £1.2m. 
  • £2m through ensuring children are in the best place for them by boosting internal residential provision and reviewing external placements.  
  • £1m in workforce savings to be achieved through vacancies.  
  • £1m through increased sales, fees and charges income 
  • £1m extra income through the council’s investment estate 
  • £200,000 through increased advertising revenue 
  • £100,000 through increased bereavement services charges 

Measures to close the remaining £15m budget gap for 2024/25 have also been identified and will be included in the budget proposals reported to the Executive in February. These are: 

  • A £6.1m Greater Manchester Combined Authority waste levy rebate 
  • £3.93m through improved Council Tax and Business Rates collection, including the introduction of a 100% Council Tax premium on unfurnished empty homes. 
  • £1.5m through extra income from buildings owned by the Council – through increased rental charges and the renting out of vacant units 
  • £1.2m through interest on airport loans and investments  
  • £1m through energy savings due to reductions in wholesale prices 
  • £0.5m through the rephasing of ICT investments 
  • £0.5m through the rephasing of Growth & Development investments 
  • £0.3m through in-year underspends in back office budgets 

The combination of these measures will enable the Council to set a balanced budget for 2024/25. As many of the above are one-off measures, further cuts will now be required in 2025/26. Careful consideration is also being given to how limited one-off extra funding announced recently by the Government can best be used. 

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