Report of the Deputy Chief Executive and City Treasurer attached

The reports set out the impact of COVID-19 and other pressures and changes on the Council's budget for the period 2021-2025. It summarises the savings options under consideration from 2021/22 as well as set out the approach to Equality Impact Assessments and consultation as part of the budget setting process. It also sets out next steps in the budget process, including scrutiny of the draft budget options by this Committee.

The Committee considered a report of the Deputy Chief Executive and City Treasurer that set out the impact of COVID-19 and other pressures and changes on the Council's budget for the period 2021-2025.  The report also set out the impact of COVID-19 on the capital programme and the implications for the budget.  The report stated that the budget reflected the fact that the Council had declared a climate emergency by making carbon reduction a key consideration in the Council’s planning and budget proposals.

The main points and themes within the report included: - 

• The Medium Term Financial Plan remained challenged by uncertainty, which included the outcome of the Spending Review and post 2021/22 the potential changes to how local government funding was distributed; 
• Prior to COVID-19 there was an underlying budget gap of c£20m for 2021/22 rising to c£80m by 2024/25; 
• Dealing with the impact of COVID-19 had resulted in major spending pressures, particularly in social care, but also across all Directorates; 
• The forecasted budget shortfall relating to COVID-19 pressures and the Budget Position 2021/22 to 2024/25; 
• Initial proposals across all Directorates to start addressing the budget gap in advance of the Spending Review and Local Government Financial Settlement; 
• The need to undertake an Equality Impact Assessment on the options put forward, particularly those that involve impacts on services for residents and reductions in the Council’s workforce; 
• Proposed consultation on budget options and timescales; and   
• Next steps. 

The Committee also considered a report of the Strategic Director for Children and Education Services which outlined the financial position and set out officer

options for savings against each service area aligned to the Committee’s remit to help achieve a balanced budget in 2021/22. 

The main points and themes within the report included: - 

·         Background and context;

·         The Directorate’s budget approach;

·         The Children and Education Services Directorate Revenue Budget 2021/22;

·         Areas for consideration, subject to the outcome of the Local Authority Settlement;

·         Impact on the workforce;

·         Next steps; and

·         A summary of the savings proposed.

The Committee was invited to comment on the reports prior to their submission to the Executive on 11 November 2020.

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

·         Concern about the financial position the Council was in and the level of funding from the national Government and that Members should lobby the Government for more funding, including money to cover the additional costs the Council had incurred in responding to the pandemic;

·         Concern about the number of unknown factors, such as how much the financial package from the Government would be and what the future demand on services would be;

·         A suggestion that the Council’s reserves could be used to address the funding gaps;

·         Concern that any reduction in early intervention would impact negatively on children and their families and be more costly in the long term;

·         Concern that the pandemic was disproportionately affecting some groups, such as children and young people from Black and Minority Ethnic (BAME) communities, that budget cuts could embed inequalities further and the importance of looking at Equality Impact Assessments (EIAs) when assessing these options;

·         Concern about the impact of proposals on families with No Recourse to Public Funds (NRPF);

·         Concern about the removal of Council funding for Child and Adolescent Mental Health Services (CAMHS) at a time when demand for mental health support was likely to increase; and

·         To ask for further information on the £400k saving from the Free Travel budget 2021/22 which was referred to in the report.

The Strategic Director for Children and Education Services informed the Committee that the options for making budget cuts within the Directorate were limited, for example, because much of the Education Services budget came from the Dedicated Schools Grant (DSG) which could only be used for limited purposes, and that every possible budget saving option would have an impact on children and young people.  He advised that EIAs would be used to assess the impact of the proposals of different groups but it was expected that the proposed savings options would impact across all groups.  He advised Members that effective early intervention did reduce costs later; however, there were limited options available for making savings. 

In response to a Member’s question about the parenting commission referred to in section 4.52 of the Budget Options report, the Deputy Director of Children’s Services advised that efficiencies could be made within this and that the specification of which families would be eligible for support under the proposed revised commission was still to be determined.  He clarified that section 4.55 of this report referred to costs which could be avoided by preventing children from entering the care system or finding a permanent solution for Our Children (Looked After Children) which enabled them to leave the care of the local authority, using approaches such as Early Help, Alonzi House and permanence planning.

The Strategic Director for Children and Education Services reported that there had been an underspend on the NRPF budget and the proposed budget reduction in this area was to remove that underspend.  He informed Members that the removal of Council funding for CAMHS had been considered by the Committee previously and this decision had already been taken.  He advised Members that the national Government had previously provided councils with ringfenced funding for this service but had ceased providing ringfenced funding a few years ago.  He reported that, at that time, most councils had stopped providing funding to their local CAMHS service and Manchester City Council had continued to provide this funding for a number of years but had subsequently decided that it could no longer continue to provide this funding.  In response to a Member’s question, he clarified that the proposed reduction in Early Years Speech and Language referred to in section 4.53 of the Budget Options report related to training for staff on the early identification of young children with speech and language needs.  He reported that training on this had already been delivered on a large scale across Early Years and health staff and that specialist support for children in need of speech and language therapy was separate from this.

The Director of Education informed Members that the criteria for eligibility for Free Travel passes to school had already been changed but that passes had continued to be provided for children who had been eligible at the time they started at their current school, even if they would not have been eligible under the new scheme.  She advised that the cost of the scheme had reduced over time due to that cohort of pupils who had been eligible under the old scheme moving through the education system and due to improved sufficiency of school places, meaning that more children were able to be allocated a suitable school place near their home than had been the case a few years ago.

Decisions 

1.            To note that the Committee’s comments will be provided to the Executive in advance of its meeting on 11 November 2020.   

2.            To record the Committee’s dissatisfaction with budget proposals which would affect vulnerable children in Manchester but to recognise that this situation is the result of the levels of funding provided by the national Government and that Members will continue to lobby Government on this matter.