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 18 December 2023 the Council was forecasting an estimated budget shortfall of £38m in 2024/25, £79m in 2025/26, and £90m 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, the budget was balanced for 2024/25 and the remaining gap reduced to £29m in 2025/26 and £41m by 2026/27. This position assumed that savings of £21.4m were delivered next year.  

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 the final budget proposals on 14 February 2024.

The Executive Member for Finance and Resources stated that the Government’s approach to the Local Government Settlement had been chaotic and only announced just before Christmas. He said the final announcement when announced had resulted in a cut of 84% in the Services Grant and this equated to a £6.1m cut for Manchester. He stated that this had resulted in an outcry from Local Authorities and MPs from all political parties. He stated that this situation needed to be understood in the context of fourteen years of austerity and Government funding cuts and unfunded pressures such as inflation and population growth.  

The Executive Member for Finance and Resources added that the Government then swiftly announced an additional £500m for Social Care, however Local Authorities were still facing a £4bn budget gap nationally, resulting in a number of Local Authorities serving a Section 144 notice and it was anticipated that more would follow.

The Executive Member for Finance and Resources commented that, despite this, Manchester had set a balanced budget and this had been achieved through diligent planning and management that had witnessed the strategic investment in preventative initiatives; using financial reserves prudently and investment in activities that were important for Manchester residents, such as libraries; leisure centres; parks and green spaces and the Climate Change Action Plan.

The Executive Member for Finance and Resources stated that although Manchester had been able to deliver a balanced budget this year, the Council’s financial position was expected to become even more challenging. The projected budget gap, even after using reserves for 25/26, was £29m in 2025/26 and rising to £41m by 2026/27, adding that since 2010 the Council has had to make £443m of savings.

The Executive Member for Finance and Resources concluded by stating that the Government had continually failed to listen to Local Authorities.

The Executive Member for Healthy Manchester and Adult Social Care made reference to the complexity of the budget arrangements, adding that a significant amount of funding were grants and one off funding arrangements which was totally impractical when attempting to plan and deliver important services. He stated that despite the budget cuts that had been imposed on the city, Manchester had continued to invest and plan services to support some of the most vulnerable residents, making particular reference to the Better Outcomes Better Lives transformation programme that was routinely reported to the Committee. He stated that he had continued to lobby the Government for adequate funding and reiterated the importance of understanding the budget in terms of people and he called for a more sustainable and fair funding settlement for Manchester.

The Executive Member for Healthy Manchester and Adult Social Care concluded by paying tribute to the Deputy Chief Executive and City Treasurer, her deputy and the Head of Finance for their diligence when setting the budget. He also paid tribute to the finance team from the Local Care Organisation for their continued support.

Public Health Budget 2024/27

The Committee considered the report of the Director of Public Health that described the proposals for the Public Health budget for 2024/25 to 2026/27.

Key points and themes in the report included:

·         An overview of Public Health services and key priorities;

·         A detailed overview of the budget, noting that the gross 2023/24 budget detailed in the table below was £54.126m and the net budget of £43.266m. Income of £10.860m included use of reserves £3.753m, government grants £4.489m and other contributions from NHS partners, from other local authorities and Better Care Fund totalling £2.618m;

·         The latest 2023/24 global monitoring report to the Executive outlined a £0.8m underspend. Savings of £0.730m had been achieved in full. There were underspends across the staffing budgets due to vacant posts and the maximisation of external funding, and underspends on other indirect staffing costs.

·         There was a minor additional vacancy savings allocation of £0.015m for 2024/25;

·         Planned non recurrent use of reserves in 2023/24 of £0.330m was replaced in 2024/25 with the planned use of headroom in the budget set aside for contract uplifts as detailed in the report to Health Scrutiny February 2023;

·         Consideration of Growth and Pressures in 2024-2027, noting that no additional growth and pressures were approved for 2024-26;

·         An update on Making Manchester Fairer (MMF); and

·         Future opportunities, risks and policy considerations, noting that there was currently no further information on the Grant schemes income beyond 2024/25.

The Director of Public informed the Committee that the public health settlement had been received since the report had been submitted. He said that an additional £750k had been allocated, however whilst this was welcomed the budget remained under significant pressure.

Adults Social Care Budget 2024-27

The Committee considered the report of the Executive Director of Adult Social Services that described the final proposals for the Adults Social Care (ASC) budget for 2024/25 to 2026/27.

Key points and themes in the report included:

·         An overview of ASC services and key priorities and positioning within the Manchester Local Care Organisation;

·         A detailed overview of the budget, noting that the gross 2023/24 budget was £285.023m and the net budget of £219.666m;

·         Income of £65.357m included client fees £30.416m, Better Care Fund Grant £17.791m, contributions from NHS partners of £10.267m and other income of £6.883m which included grants and use of reserves. This included the integration reserve, which was drawn down in accordance with the plan agreed for the year with NHS Greater Manchester – Manchester locality;

·         Growth and pressures in 2024-27;

·         Confirmation of the Savings Plan 2024-26;

·         An update to budget growth assumptions for the service as set out in the Council’s Medium Term Financial Plan (MTFP);

·         Commissioning and procurement priorities;

·         Workforce implications; and

·         Future risks and opportunities including significant budget considerations in 2025/26.

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

·         Paying tribute to the Executive and Senior Management Team for delivering a balanced budget;

·         Stating that the Committee retained its full confidence in the Executive and the Senior Management Team;

·         Thanking all staff working in the Public Health and Social Care teams, recognising the important work they delivered on behalf of Manchester residents;

·         Recognising and welcoming that residents were central to all decisions taken;

·         Calling on the Government to fund NHS Dentists to meet demand;

·         Noting the importance of the many preventive interventions that public health delivered and the savings that this achieved in the longer term; and

·         Noting the injustice of austerity and the disproportionate impact this had on the most deprived areas.

Decision

The Committee recommend that an extract of the budget discussion from the webcast of this meeting, along with vox pops of interviews with members of the public be sent to the Prime Minister and Chancellor of the Exchequer to support the call for fairer and sustainable funding for Manchester.