Manchester City Council are asking people in the city to give their views on options for how it will save around £50m in 2021/22.
The Council’s financial position for 2021/22 has become clearer following the Government’s Spending Review and settlement for local government at the end of last year.
The financial impacts of the Covid-19 pandemic, combined with pre-existing budget pressures (associated with supporting a growing population, and inflation), had left the Council facing a budget gap for 2021/22 of up to £100m.
Extra funding means that this worst case scenario has been averted and the most severe cuts will not need to be contemplated.
The impact of recent announcements, including funding for Covid-19 pressures, has also enabled some improvements to options from when they were first put forward last November.
For example, savings required from the homelessness directorate have reduced to £2.3m with housing-related support – which was previously facing a cut of £1.2m - protected through the investment of additional funding. This means savings can be achieved with no loss of bed spaces for people experiencing homelessness.
A previously mooted reduction of £1.5m in the Council’s contribution to discretionary housing payments, which are predominantly Government-funded, has been reduced to £1m. It is believed impacts of this lower reduction will be largely offset by temporary increases in Local Housing Allowance rates and Universal Credit.
However, the Council will still need to make cuts and savings totalling around £50m - roughly equating to the options identified by officers in a report to November 2020’s Executive meeting.
Government funding to Councils is based on the assumption that they will raise Council Tax by 1.99 per cent with a further 3 per cent precept to help meet adult social care costs. Manchester people were asked for their views on this potential Council Tax increase in a consultation before Christmas. The results of the consultation will be considered as part of the budget-setting process.
If the combined 4.99 increase was not taken, a further £8.5m of cuts would have to be found (£5.1m for adult social care, the amount raised by a 3 per cent increase and £3.4m for other services the amount raised by a 1.99 per cent increase.)The Council remains committed to delivering the priorities for Manchester including deeper integration of health and social care to support a healthy and independent population, delivering affordable housing and achieving its carbon reduction ambitions.
Officers have identified cuts and savings options of around £50m across the Council’s directorates (Health and social care £20m - this would reduce to £14.9m if the adult social care precept is used, raising £5.1m; Children’s Services £11.3m; Neighbourhoods £7.4m; Corporate Core £6.3m; Growth and Development £2.3m, and Homelessness £2.3m.
Sir Richard Leese, Leader of Manchester City Council, said: “While we are not in quite as dire a position as originally feared, this year’s budget remains a difficult one not helped by the fact that we have only had funding from Government for next year and little clarity beyond that.
“There is no doubt that the costs and impacts of the Covid-19 pandemic will be ongoing as the Council continues to lead the city’s recovery and to support its people through tough times. So too will the underlying funding pressures such as population increase and inflation which increase the cost of services. Without adequate Government funding which recognises these pressures and allows us to plan ahead properly, we will face further hard choices in the years ahead.
“For now, officers have outlined savings and cuts options for 2021/22 which they believe will best address the budget gap with the minimum detrimental impact on services. We don’t think asking people to pay an extra precept is the best way to fund adult social care but in the absence of sustainable Government funding, not taking it would mean we had to find £5.1m of extra cuts affecting some of our most vulnerable people.
“Before drawing up final proposals, we want to hear and consider what Manchester people think about the options.”
The consultation starts today, Wednesday 20 January 2021 runs until Sunday 21 February 2021. For more information, and to take part, visit www.manchester.gov.uk/budget