Report of the Strategic Director – Growth and Development.

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 reduces to £28m in 2023/24, £69m in 2024/25 and £96m by 2025/26. Officers have identified potential savings options to reduce the budget gap totalling £42.3m over three years.

This report sets out the priorities for the services in the remit of this committee and details the initial revenue budget changes proposed by officers.

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 and cuts options will be required to be worked between now and January 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 a report of the Strategic Director of Growth and Development which outlined the priorities for the services within the remit of the Economy Scrutiny Committee and highlighted the initial revenue budget changes proposed by officers.

Key points and themes within the report included:

·         The Growth and Development directorate was made up of City Centre Growth and Infrastructure, Strategic Development, Strategic Housing, Planning, Building Control and Licensing, Investment Estate, Manchester Adult Education Service (MAES), Work and Skills, Digital Strategy and Highways;

·         The Growth and Development directorate has a gross budget of £35.5 million and generates £44.8 million in income;

·         The Highways service has a gross budget of £25.1 million;

·         Proposed savings for these services had been identified and amounted to £3.54 million over three years;

·         Proposed savings and income generation included:

o   Additional income from Manchester Airport Group to the Investment Estate department, although this was dependent on meeting forecasted performance;

o   A saving of £170k once the former Gala Bingo building in Wythenshawe is disposed of and outstanding borrowing is settled;

o   Deletion of a vacant grade 4 post in the Strategic Housing department;

o   Generating increased income through Highways;

o   Deletion of two vacant posts within the Highways service and one Neighbourhood Liaison post;

o   Temporarily reducing gully cleansing for three years;

·         There were no budget growth proposals or emerging pressures within the directorate;

·         An overall reduction of 4 Full Time Employees (FTE) was anticipated as part of the savings proposals but this would be managed through natural turnover and deleting vacancies; and

·         The directorate continued to be affected by Covid-19, particularly in the Investment Estate service, and work was ongoing to assess requests for rent holidays on a case-by-case basis.

The key points and queries that arose from the Committee’s discussions included:

·         The importance of the Work and Skills service and Manchester Adult Education Services (MAES) and how these were funded;

·         Whether the Strategic Assets Management Plan would be scrutinised by Resources and Governance Scrutiny Committee;

·         Greater Manchester Combined Authority’s (GMCA) budget proposals and how these would affect Manchester City Council;

·         Expressing concern over the proposal to temporarily stop gully cleansing;

·         How temporarily reducing gully cleansing would save money;

·         How the Council would continue to engage with neighbourhoods if it deleted the Neighbourhood Liaison Officer post as proposed;

·         Suggesting that Highways Inspectors be concentrated in areas of regeneration;

·         The impact of deleting the vacant post in the Highways Maintenance Team; and

·         Whether the increased fee income from design and project management work, outlined in Appendix 1, was an external income generator or an internal cost.

The Executive Member for Housing and Development explained that the Growth and Development directorate was income-generated through assets, investment estate and new homes which helped to generate net income for the Council to support other services and wider work.

The Executive Member for Skills, Employment and Leisure highlighted the interconnectedness of budget cuts and that these would have knock-on impacts on different services and enabling the Council to achieve its priorities.

The Director of Inclusive Economy explained that the Adult Education budget was largely a central government budget and had been cut over the previous 10 years. MAES was funded by a portion of this budget which is devolved through GMCA but there had been no increase in this, which had resulted in MAES using reserves, particularly during the Covid pandemic. The number of teaching and non-teaching staff was reduced in 2021 as a result of this and this had been highlighted to GMCA and central government.

The Work and Skills service was part of the Core Cities budget, which had been reduced slightly in 2020 and no changes had been or were anticipated to be made to this budget.

In reference to GMCA’s budget proposals, the Directorate Head of Finance advised members that there had been an indication on some of the financial support and charges from GMCA. This was not finalised and he endeavoured to address this outside of the meeting.

In response to a query regarding the Strategic Assets Management Plan, the Strategic Director of Growth and Development explained that this would bring together information, policies and procedures on the Council’s assets and would provide a framework for decision-making as to how these assets would be used. The Plan would fall within the remit of the Resources and Governance Scrutiny Committee but a briefing note could be provided to members of Economy Scrutiny Committee, which the Chair welcomed. 

The Leader of the Council welcomed the questions and challenge from the Committee. She commended the work and proposals of officers, who sought to prioritise the most vulnerable services and residents. She stated that the situation the Council faced was a result of an ideological attack faced by cities like Manchester and political choices and that this had informed the proposed budget cuts.

The Head of Network Management advised that the Highways service had undertaken significant work to identify what he referred to as the “least-disruptive” savings. He reiterated that the proposal was for the gully cleansing service to be halted for two years and to move to a risk-based approach. There had been significant investment into gully cleaning and highways repairs in recent years and this enabled useful data collection to inform the frequency of gully cleaning. The proposed approach would look at the resilient and key route networks, city and district centres and areas prone to flooding and identify the best way forward for the next two years. Reactive gully cleaning machines would still be in operation to quickly respond to key areas.

Assurances were provided that cycle lanes would continue to be cleaned as part of regular and scheduled inspections.

In response to a question around the Neighbourhood Liaison Officer post, it was acknowledged that the approach to communication and engagement with neighbourhoods required improvement and there was a proposal to work closely with Neighbourhoods teams to facilitate this.

The Head of Network Management commended the work of Highways Inspectors and assured members that utilities companies are held to account for any damage they cause to highways. They are required to rectify any damage and are fined if they do not comply. Highways worked closely with Planning Officers and developers to ensure the use of suitable materials in and improvements to and maintenance of surrounding areas of new developments. The Committee was reminded that a report on Highways would be considered at the meeting in January and would provide further information on this.

The Head of Network Management explained that increased fee income from design and project management work related to fees which are charged to internal projects for the design of improvement schemes. A benchmarking exercise had been undertaken and officers proposed a small uplift in fees in line with what other local authorities and private sector organisations charged. The Committee was informed that another benchmarking exercise had been undertaken around fees charged to developers and an increase was proposed for when developers want the Council to adopt roads or undertake highways improvements to junctions.

In response to the Chair’s question around the impact of the proposal to delete a vacant post in the Highways Maintenance Team, the Head of Network Management stated that this would have only a small impact around the timing of works. Officers were confident that the service would remain able to respond to issues in line with the code of practice and that safety would not diminish.

Decision:

That the report be noted.