Report of the Deputy Chief Executive and City Treasurer

The Council is forecasting an estimated budget shortfall of £46m in 2024/25, £86m in 2025/26, and £105m by 2026/27. After the application of approved and planned savings, and the use of c£17m smoothing reserves in each of the three years, this gap reduces to £1.6m in 2024/25, £30m in 2025/26 and £49m by 2026/27. This position assumes that the savings approved as part of the Medium-Term Financial Strategy in February 2023 of £36.2m over three years are delivered.  

This report provides a high-level overview of the updated budget position. 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 2024.

The Committee considered the report of Deputy Chief Executive and City Treasurer that described that the Council was forecasting an estimated budget shortfall of £46m in 2024/25, £86m in 2025/26, and £105m by 2026/27. After the application of approved and planned savings, and the use of c£17m smoothing reserves in each of the three years, this gap reduced to £1.6m in 2024/25, £30m in 2025/26 and £49m by 2026/27. This position assumed that the savings approved as part of the Medium-Term Financial Strategy in February 2023 of £36.2m over three years were delivered.  

This report provided a high-level overview of the updated budget position. Each scrutiny committee was invited to consider the current proposed changes which were within its remit and to make recommendations to the Executive before it agreed to the final budget proposals in February 2024.

Key points and themes in the report included:

·         Updates on the refreshed position including progress in reaching a balanced budget, reflecting preliminary savings and investment options;

·         The government was expected to announce the Autumn Statement on 22 November 2023, but no major changes were expected;

·         Government funding for 2024/25 would be confirmed in the provisional finance settlement, expected late in December 2023;

·         The accompanying report set out the priorities and officer proposals for the services within the remit of this committee. This included a reminder of the savings proposals identified as part of last year’s budget setting process (£36.2m across three years) and additional savings for consideration (£2.5m from 2024/25). As far as possible these were aimed at protecting the delivery of council priorities and represented the least detrimental options; and

·         There remained a forecast shortfall of £1.6m next year. Any further reduction to the underspend this year would reduce the need to top back up General Fund reserve in 2024/25 and help bridge this shortfall. In addition, the Collection Fund position would be finalised in January and the final levy amounts from GMCA confirmed.

The Executive Member for Finance and Resources stated that Manchester had been subject to unfair budget cuts over the previous fourteen years. He stated that the decision to reduce budgets to cities like Manchester had been an ideological decision taken by the government. He described that the financial situation of local authorities across the UK was very precarious, stating that it had been estimated by the Local Government Association that there would be a £4billion shortfall in total next year. He stated that he endorsed the ask of the Leader in her recent letter to the Chancellor of the Exchequer ahead of the Autumn Statement. He called for an end to last minute provisional settlements, but rather long term, fair and stable funding arrangements for all local authorities. 

The Executive Member for Healthy Manchester and Adult Social Care stated that the government had shown nothing but contempt for Manchester, however despite this Manchester had continued to ensure that the residents of the city were at the heart of all decisions taken. He said that despite the challenges presented by government, Manchester continued to be innovative in how it worked for all residents.

The Deputy Executive Member for Healthy Manchester and Adult Social Care referred to the recent visit undertaken by members of the Committee to the Control Room. The Control Room was the integrated hub for supporting flow out of hospital into the community. The Control Room was responsible for ensuring the safe and timely discharge of citizens across hospitals and to support the system to work together to achieve the best outcomes for people. She stated that this was one positive example of the many innovations developed in Manchester to support residents despite the cuts imposed on the city. The Committee expressed their appreciation to the staff at the Control Room for facilitating the visit from Members.

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

·         Paying tribute to all workers across the Council and the NHS for the work they undertook on behalf of the citizens of the city;

·         Thanking the Executive Members and the Directors for their continued dedication in supporting residents, recognising the difficult financial landscape they had to navigate;

·         Condemning the government’s policy of austerity and the impact this had on all Mancunians;

·         Welcoming that residents were central to all decisions taken; and

·         The Committee expressed the opinion that they retained their confidence in the Executive Member, the Director of Public Health and the Executive Director of Adult Social Services.

Decision

To note the report.