Report of the Deputy Chief Executive and City Treasurer

This report sets out the financial challenge facing the Council, the latest forecast position, and the next steps. The Council is forecasting an estimated budget shortfall of £44m in 2023/24, £85m in 2024/25, and £112m by 2025/26. After the use of c£16m smoothing reserves in each of the three years, this gap reduces to £28m in 2023/24, £69m in 2024/25 and £96m by 2025/26.

This report sets out the high-level position. Officers have identified potential savings options to reduce the budget gap totalling £42.3m over three years.

Even after these proposals there remains a budget gap of £7m to close to get to a balanced budget in 2023/24 and further savings options will be developed between now and January 2023 and be reported back to Scrutiny committees in February. Each scrutiny committee is invited to consider the current proposed changes which are within its remit and to make recommendations to the Executive before it agrees to the final budget proposals in February 2023.

The Committee considered the report of the Deputy Chief Executive and City Treasurer that set out the financial challenge facing the Council, the latest forecast position, and the next steps.

Key points and themes in the report included:

·         The Council was forecasting an estimated budget shortfall of £44m in 2023/24, £85m in 2024/25, and £112m by 2025/26. After the use of c£16m smoothing reserves in each of the three years, this gap reduced to £28m in 2023/24, £69m in 2024/25 and £96m by 2025/26;

·         Setting out the high-level position;

·         Describing the officer identified potential savings options to reduce the budget gap totalling £42.3m over three years;

·         Noting that even after these proposals there remained a budget gap of £7m to close to get to a balanced budget in 2023/24 and further savings options would be developed between now and January 2023 and be reported back to Scrutiny committees in February; and

·         Each scrutiny committee were invited to consider the current proposed changes which were within its remit and to make recommendations to the Executive before it agrees to the final budget proposals in February 2023.

The Executive Member for Healthy Manchester and Adult Social Care introduced this item by giving an account of his personal experience of accessing social care to support a family member. He stated that his experience, both as a resident accessing services and as an elected Member, was that all staff across the service genuinely cared about the residents of Manchester and every decision taken by officers had this as their primary consideration.

The Executive Member for Finance and Resources stated that the reports presented were currently officer proposals only. He stated that the Government’s Autumn Statement and final financial settlement were still to be announced. He stated that the public consultation on the Council’s Budget had commenced and would run until 7 January 2023, adding that difficult decisions would need to be taken and it was important to hear the views of Manchester residents. He commented that the financial situation the Council found itself was not the fault of the Council, adding the Council was a well manged and financially responsible organisation and this could be evidenced. He stated that the fault was the direct result of ideological decisions taken by the government over the previous decade. He stated that the budget cuts imposed on Manchester had been unfair. He stated that since 2010 Manchester had lost £438m from the budget and if Manchester had received the average cuts to funding the city council budget would be £77m per year better off. He stated that it was calculated that the gap in Local Authority funding nationally was in excess of £3bn, adding further that it was estimated that one in six councils could run out of money next year. He called upon the government to protect councils as these drove local economic growth and provided essential services for some of the most vulnerable in society, especially in the context of the worsening cost of living crisis.

Decision

To note the report.