Manchester City Council responds to local government financial settlement

Manchester City Council is to prepare plans to find a further £80m of savings from its budget over the next two years as a result of the financial settlement imposed by central government.

The figure is broadly in line with the Council was expecting, and is in addition to the £170m cuts since 2010.

The Council has already announced plans to open a scheme of voluntary severance and early retirement. It is anticipated that we will have to further reduce our workforce by between 700 and 900 full-time posts to ensure we can produce a balanced budget – which for local government is a legal requirement.

Councillor Jeff Smith, Executive Member for Finance, said: "We've already seen a huge impact on the services we have been able to provide to Manchester people, having to cut £170m from our budget and around 2,000 jobs after the previous financial settlement.

"Despite Manchester being the fourth most deprived local authority area in the country, we received one of the five worst settlements in England in 2010.

"Local government finance is hugely complicated, but the latest settlement was broadly in line with what we were expecting. The result is that we will to reduce our budget by another £80m over the next two years.

"We will produce plans early in the new year to manage these reductions as best we can but we can't pretend it will be easy. And make no mistake, this settlement represents another cut to the money we receive from central government which is going to have a real and lasting effect on Manchester people."

The £80m comprises about £45m reduction in central government funding after assumptions relating to council tax and a further £35m unavoidable cost pressures which have not been funded by central government such as inflation, pension costs and a rising population.

Cllr Smith added: "The times ahead are going to be extremely tough, but we remain committed to doing all we can to ensure that the most vulnerable in Manchester continue to be protected, that we deliver our essential services effectively and that we encourage economic growth and investment in the city."

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