Report of the Deputy Chief Executive and City Treasurer attached

The Executive considered a report of the Deputy City Treasurer, which provided and update on the main announcements from the provisional local government finance settlement 2022/23 announced 16 December 2021, with a focus on the impact on the Council and its budget for 2022/23. It also outlined the main budget assumptions behind the Medium-Term budget position 2022/23 to 2024/25.

The Leader commented that whist the overall settlement announcement was towards the positive end of expectations, this did not constitute being a good settlement and the Council had lost over £400m from its budget since 2010.  If the Council had received the average level of cuts in funding, this year it would have at least £85m in its budget.  The Council was also still dealing with the legacy of the Covid pandemic and the promise from government that it would compensate local authorities with whatever they needed.  She added that it was not possible to undo a decade of cuts with a settlement in one year that was not as severe as anticipated and looking beyond next financial year there was significant worries which meant that the Council needed to continue its call for fair and sustainable funding.

The Deputy Chief Executive and City Treasurer commented that whilst the settlement was better than anticipated, the Council still faced a very challenging three year budget position. In 2022/23 the Council would be using the last of its commercial income reserve to help balance the budget and there was a remaining budget gap of approximately £37m in2023/24 and £58m in 2024/25.  As the settlement announcement was for only one year, the Council was facing increasing uncertainty with proposals around fairer funding reforms and the implications of these.

A full Medium Term Financial Plan would be presented to Executive in February and insofar as the savings required, It was expected that mitigations in the region of £7.7m, as previously identified, would be sufficient to balance the 2022/23 budget.

The Deputy Leader (Adult Health and Care) commented that the Adult Social Care (ASC) budget accounted for 35% of the Councils overall budget as it was required to provide statutory services and the settlement provided no additional funding for increased demand in ASC.  A fair, sustainable plan was needed in order to plan effectively to provide essential services for Manchester residents as the raising of the Adult Social Care precept element of the Council Tax and increase in the rates of national insurance contributions were a regressive tax placing a heavier burden on low income earners.

The Executive Member for Housing and Growth highlighted the cuts in funding to deliver new affordable housing and called on government to redress this imbalance and provide appropriate funding to build social rent and affordable rent homes that were needed.

Councillor Karney commented on the increase in levels of poverty and inequalities in communities just outside of the city centre which had grown over the last ten years as a result of the austerity measures placed on the Council by the government.

The Executive Member for Children and Schools commented on the national  increase in child poverty as a result of government policy, which was evident in Manchester by the increase in children receiving free school meals. 

Decision

The Executive note the report.