The provisional local government finance settlement for 2016/17 was released by the government on December 17th 2015. It was expected that there would be further announcements made just before or after Christmas but this does not seem to have happened.
As yet there has been no information from Manchester City Council on their proposals for cuts. Sir Richard Leese in The Leaders Blog has stated that the aim of MCC is:
“to publish a one year draft budget in the middle of January which will give four weeks of consultation before the Executive agrees on its budget recommendations to the Council.”
The provisional reduction in Manchester’s core expenditure is £15.5 million. This is less than the figure of £25 million that Manchester City Council had been working on. This may be potentially offset by £13 million windfall from Manchester Airports Group. However, the interpretation of the government announcement is complicated and based on a number of assumptions including estimates of council tax and business rate income. Additionally council liabilities are rising in some areas which may mean an increased level of cuts elsewhere.
In recognition of the impact of the adoption of a National Living Wage and rising social care expenditure the government is proposing to allow affected councils to raise council tax by 2%. This will go some way to reducing the impact in Manchester but will not meet the estimated costs of £23 million between 2016 and 2021.
The longer term forecast is that MCC’s core funding will fall by a further £6.3 million in 2017/18 but then rise to £430.6 million by 2019/2020 £4 million less than the 2015/16 total of £434.6 million. Other areas such as Leeds and Birmingham are facing large cuts by 2019/20 whilst some others such as Buckinghamshire and Cambridgeshire are predicted to have increased income.