Report of Deputy Chief Executive and City Treasurer

This report sets out the latest forecast revenue budget position, and the next steps.

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 15 February 2023.

The Committee considered the report of the Deputy Chief Executive and City Treasurer that set out the latest forecast revenue budget position, and the next steps.

Following the provisional finance settlement announced 19 December the Council was forecasting a balanced budget for 2023/24 and 2024/25. The risk had moved to the next Spending review period 2025/26 where a shortfall of £57m was forecast. This reduced to £40m after the proposed use of £17m smoothing reserves.

The report further described that in November 2022 scrutiny committees were presented with cuts and saving options totaling £42.3m over three years for consideration. The provisional settlement on 19 December reflected a change in government policy and provided more funding than initially expected. This had given the opportunity to review the quantum and phasing of savings. It was now proposed that options of £36.2m were progressed. The settlement also gives some scope for targeted investments which would put the council in a more sustainable position to face the next spending review in 2025.

The Executive Member for Finance and Resources paid tribute to the Deputy Chief Executive and City Treasurer and her team for all of their hard work in bringing forward the suite of budget reports following the settlement announcements. He stated that the budget settlement needed to be considered in the context of over a decade of austerity that had been imposed on Manchester. He stated that the result of this was that the Council’s budget had reduced by £428m over this period, and that if the city had received the average cut in funding, Manchester would be £77m per year better off.

He commented that the decision to cut local authority funding was a result of ideological decisions taken by the Government, noting that the Government had failed to recognise or apologise for the instability they had caused to the national economy. He further referenced the impact of inflation, population growth in the city and the cost-of-living crisis that all impacted on budgetary pressures. He commented that the Government had failed to communicate their financial decisions for the city, noting the recent experience of announcements of the Levelling Up bids.

The Executive Member for Finance and Resources stated that the funding decisions of the Government had effectively forced the Council to increase Council Tax. He advised that the Council was able to deliver a balanced budget and Council Tax would be used to support the most vulnerable residents in the city; support the social care sector and invest in the future of the city.

The Executive Member for Finance and Resources stated that despite the challenges the budget proposed a further £1m investment into waste and street cleaning. This would support Basic Services and Street Cleaning and was in addition to the £1m investment into waste and street cleaning put forward as part of the 2022/23 budget. It was further proposed that there be a further investment of £1.2m to support specific activity in and around the City Centre, District Centres and key arterial routes.

Some of the key points that arose from the Committee’s discussions were: -

·         Noting the importance of considering the suite of budget reports in the context of 13 years of cuts and austerity;

·         Stating that the Government’s funding was unfair; and

·         Recognising the hard work of Executive Members and officers in bringing forward the suite of reports.

Decision

To note the report and endorse the recommendation that the Executive approve these budget proposals.