Report of the City Treasurer

This report provides an overview of the key announcements within the Chancellor of the Exchequer’s 2018 Autumn Budget outlining the Government’s fiscal agenda, and the implications for Manchester.

The Committee considered a report of the City Treasurer, which provided an overview of the key announcements within the Chancellor of the Exchequer’s 2018 Autumn Budget outlining the Government’s fiscal agenda, and the implications for Manchester.

Officers referred to the main points and themes within the report which included:-

·                The 2018 Autumn Budget set out an improved economic forecast and indicative increased public sector spending over the next five years;

·                Government expenditure was now expected to grow at 1.2% per year in real terms from 2019-20 onwards (contrasted to an average cut in real-term funding in the 2015 Spending Review of -1.3%);

·                The 2019 Spending Review would decide on the balance of funding between government departments, however, it was already clear that much of the additional spend would be directed to the NHS, with spending in other departments likely to remain flat or decline;

·                Should the government be unable to reach a Brexit deal with the EU, there could be an upgrade the 2019 Spring Statement to a full fiscal event, which could include further tax or borrowing measures;

·                There were announcements for additional Local Government funding this financial year and next.  Whilst welcome, they were small and unlikely to have a fundamental impact on the Council’s budget strategy for 2019/20, however, the additional Social Care funding could meet some of the pressures faced;

·                Specific allocations announced and the associated funding for Manchester which included:

·                a further £240m in 2019/20 for adult social care which equated to £2.667m for each year for Manchester - this followed the allocation of a similar amount in 2018/19;

·                £410m Social Care grant in 2019/20 for adults and children’s social care, Manchester’s indicative amount was £4.555m;

·                £420m in 2018/19 for potholes that would be allocated directly to highways authorities and must be spent prior to 31 March 2019.  The allocation for Manchester was £1.686m;

·                £55m for Disabled Facilities Grant in 2018-19, of which the estimate was £0.814m for Manchester.  This was generally a capital grant; and

·                Other national funding was being made available for the following areas:

·                £84m for 5 years on the children’s service programme in 20 areas from 2019/20;

·                £675m Future High Streets Fund in 2019-20 to support local areas to improve access to high streets and town centres; and

·                £10m capacity funding made available to support housing deals with authorities in areas of high housing demand to deliver above their Local Housing Need.

Some of the key points that arose from the Committees discussions were:-

·                Was there an update on what the proposals were for the pooling of the Council and MHCC budgets as part of the Better Care Fund;

·                It was felt that there needed to be appropriate scrutiny of welfare reforms and Universal Credit and the impact that this were having on the city and the Council; and

·                Reassurance was sought that where there were time limits on the spending of certain funding, such as within Highways, work was being undertaken to ensure that this money was being spent within the required timeframe.

The City Treasurer advised that the proposed joint pooling of budgets between the Council and MHCC had now been agreed and was in the main to be used for covering additional winter pressure funding to ensure that adult social care pressures did not create additional demand on the NHS.  The pooled budget would also be used towards strengthening mental health support and social work capacity.

The Committee was advised that Economy Scrutiny Committee had responsibility for scrutinising the impacts of welfare reform and universal credit on the city and its residents, however, it would be within the remit of this Committee for it to scrutinise the financial impact of welfare reform and Universal Credit to the Council.

The City Treasurer reassured the Committee that were funding had been received which had stipulations for it being spent within a certain time frames, this was taking place and this would be reported as part of the budget process in February 2019.

Decision:

The Committee:-

(1)       Notes the report; and

(2)          Requests that Economy Scrutiny scrutinise the impacts of welfare reform and universal credit on the city and its residents and that members of Resources and Governance Scrutiny Committee be invited to attend the meeting when it does.