A consultation on a potential increase to Manchester’s Council Tax in order to protect service opens today, Tuesday 8 December 2020.
The Government’s recent Spending Review allowed councils to increase their element of Council Tax by up to 1.99 per cent plus an additional 3 per cent precept to help meet adult social care costs.
The Council is considering using this full possible amount – which together would be a 4.99 per cent increase and raise around £8.5m – to help protect services from further cuts and especially to support adult social care for those in need.
If this increase is brought forward, it will reduce the need for cuts.
Manchester City Council is facing a challenging budget position in 2021/22.
We normally set our budget three years at a time but on this occasion we will only be given funding for one year by the Government which makes it impossible to plan with any certainty beyond next year.
The severe impact of the Covid-19 pandemic has meant increased costs – especially for services such as adult social care and homelessness which support some of the city’s most vulnerable people.
The estimated ongoing cost of the pandemic to adult social services next year is £13m. The 3 per cent adult social care precept will raise around £5m of this.
At the same time, the pandemic has meant a big hit to our income such as the annual dividend we receive through our part-ownership of Manchester Airports Group. The anticipated total hit to next year’s budget from Covid-19 costs is £134m.
These Covid-19 impacts have come on top of pre-existing budget pressures caused by inflation and supporting a growing population.
Announcements of one-off funding in the Government’s recent spending review suggest we will not be looking at the absolute worst case scenario for 21/22, which was a shortfall of around £100m. But we are still awaiting full details of how much we will be allocated and anticipate we will still need to deliver in the region of £50m-worth of cuts to ensure the Council is on a sustainable footing.
The extent of savings required will partly depend on whether the 1.99 per cent Council Tax increase and 3 per cent adult social care precept are taken, so this consultation will help shape the overall picture.
People are not being asked at this point to comment on cuts and savings options. These options will be the subject of a separate consultation which will take place in early 2021.
Sir Richard Leese, Leader of Manchester City Council, said: “We recognise that these are difficult times for many people so it is with a heavy heart that we are considering these increases. As ever, support will be available for those with the lowest incomes.
“We continue, along with other Councils, to lobby Government for adequate and sustainable funding. We haven’t got that and in the meantime we are doing our best to maintain activities that range from supporting our most vulnerable residents through to providing key services like refuse collection and keeping our economy going and people in jobs.
“Understanding Manchester people’s views will help shape our budget and how we respond to the challenges we face.”
The Council Tax consultation will close on Thursday 24 December 2020.
To take part in the consultation visit www.manchester.gov.uk/CTconsultation