Manchester City Council has published details of options to make £13.8m of savings in its budget for 2016/17.
The Council’s financial position, and approach to addressing it, is set out in a series of reports which will be considered at scrutiny meetings this month and a special Executive meeting on 17 February before a final budget is set in March.
The Council initially faced a £54.5m shortfall made up of a £27.7m reduction in government funding and £26.8m of unfunded cost pressures – including inflation, a growing population, and costs associated with national pay and pension policy. In addition, even with this level of cuts, the Council is acutely aware that there is a need to spend more money on tackling fly-tipping and dumping, pavement and highways repairs, keeping our streets clean, and other issues raised regularly by Manchester residents. It is proposed to allocate just over £2m to this in the budget.
But prudent planning has helped reduce the needs for cuts, with the airport dividend – paid to the Council because of its large shareholding in Manchester Airports Group – together with increased Council Tax take (more properties paying and improved collection) by around £25.7m.
Once changes already agreed in last year’s budget, which will deliver around £12.2m of savings in 2016/17, are factored in the remaining shortfall is reduced to £18.7m.
Council Tax
Manchester has one of the lowest average Council Tax bills in the country. The Council has only raised its element of the charge once since 2010/11. But the Council needs to consider a rise this year.
Government funding levels assume Council Tax will be increased to protect essential services. Councils have been told they can increase Council Tax by up to 2 per cent to help protect adult social care – this would reduce the budget gap by £2.5m.
Government funding to freeze Council Tax bills has also ended. An additional 1.99 per cent rise to support services would raise almost another £2.5m.
This potential increase of 3.99 per cent would amount to £31.18 a year increase on a typical Band A property (£4.68 a year for people in receipt of Council Tax Support) and still leave Manchester with one of the lowest average bills in the country.
The potential extra funding through Council Tax would reduce the remaining budget gap to £13.8m.
Previous reductions
The Council has already had to make savings of £309m 2011/12-15/16.
Manchester City Council’s spending power will have gone down by £770.55 per dwelling 2010/11-16/17, meaning the city has suffered the seventh largest reduction of any council area in the country.
If Manchester had received the national average funding reduction between 2010/11 and 2016/17 the city would be £75m a year better off.
This has meant the organisation has had to transform and adapt to use its available resources as effectively as possible. The Council cannot do this alone and is working with partners on a public service reform programme - developing new ways of delivering services which promote independence and reduce future reliance on the most costly public services.
Sir Richard Leese, Leader of Manchester City Council, said: “The enormous cuts to our funding from central government over the last five years meant we have had to make extensive savings. We have coped but it has been far from easy. While the headline savings figure this time round is smaller, mostly due to our prudent planning, we will still face difficult challenges because of the cumulative impact of all the cuts to our government funding.
“But our focus remains the same – to provide the leadership to support a world-class city with a growing economy and better lives and opportunities for the people who live here.
“Devolution is not a magic bullet and funding challenges will very much remain. But it does give us greater control to help support our wider goals, especially by better integrating services to help people become more independent and less reliant on the most expensive public services.”
Councillor John Flanagan, Executive Member for Finance, said: “It is with real reluctance that we are forced to consider an increase to Council Tax. We know times are still tough for Manchester residents and have consistently kept bills low, which is why we have one of the lowest average bills in the country.
“But the latest settlement, on top of previous cuts to our funding, leaves us with little choice. We have to balance this against the need to protect services to some of the people who need them the most as well as investing in sustainable improvements. These ongoing financial pressures mean we have to look at a rise as part of our package of options.
“I would stress that this is very much a draft budget at this stage and that, just as we always do, we will listen carefully to people’s views before putting forward definitive proposals.”
The Council will explore the option being put forward by the Government of producing a three-year budget, up to 2019-20, next year. This would provide greater certainty and make more efficient service planning possible.
Savings by directorate
The Children and Families directorate accounts for more than half of the Council’s budget. As a result it accounts for the largest part of the savings options, £8.9m.
Savings options comprise:
Children’s Services - £4.6m including:
£2.6m of savings released as a result of progress so far in the Council’s strategy to safely reduce the number of looked after children through early intervention and support to stop children going into care unless it is absolutely necessary in their best interests and, where appropriate, helping looked after children move out of care or into more permanent alternative arrangements.
£457,000 through joint funding protocols with health providers to share the cost of continuing care for children with a disability
£400,000 in savings where the Council is currently funding health responsibilities, or joint arrangements need to be reviewed, through the integration of health and social care
£196,000 through efficiencies in the management of Child in Need and Child Protection cases to avoid duplication of staff and improve capacity
An overriding priority is protecting vulnerable children and ensuring that children and families receive the help and support they need. Great care has been taken to ensure that savings proposals do not have a negative impact on Children’s Services’ improvement journey after being rated ‘inadequate’ by Ofsted in 2014.
Adult Social Care - £2.8m including:
£1.3m through renegotiating arrangements where the Council is currently funding health responsibilities for intermediate care beds and medicines.
£466,000 through a review of all homecare packages to ensure that Manchester residents access the best homecare but also making greater use of assistive technology and extra care schemes which are currently in development.
£450,000 through the better management of empty rooms in shared accommodation schemes for people with learning disabilities ensuring where vacancies arise people in costly external placements can fill them quickly
£270,000 through an increased emphasis on prevention, early intervention and community-based care for mental health rather than high cost packages and accommodation
Public Health - £871,000 through the creation of a new integrated alcohol and drugs service, which comes into operation on 1 April 2016, and a new integrated sexual health service
Education and Skills - £240,000 by funding discretionary childcare places for parents /carers of pre-school children from the Dedicated Schools Grant instead of the mainstream budget.
£100,000 through proposed changes to free school travel. Last year the Council approve changes reducing free school travel to the minimum required by law. This meant that pupils whose parents had chosen for them to attend a faith or single sex school rather than one within walking distance would no longer be eligible for free travel. Originally this was to be phased in over three years but the proposal is to bring it in sooner. There will be a separate public consultation on this proposal, with details to be announced shortly.
For the Growth and Neighbourhoods directorate savings options – which wherever possible include efficiencies through reformed services and income generation - of £2.2m have been identified. These include:
£750,000 increased income from council-owned land and property
£400,000 through increased income from planning fees due to the city’s buoyant development sector
£125,000 through reduced spending on events, safeguarding those which are world-class and deliver the maximum economic benefits. Increased sponsorship of events could raise another £46,000
£93,000 saved by refocusing cultural grants to ensure that they support the Council’s objectives and provide the greatest economic and social ‘added value’ to the city
Changes to the grounds maintenance service could deliver savings of £150,000.
The Corporate Core - which provides support and leadership to the Council includes financial, legal, ICT, revenues and benefits, communications and democratic services such as delivering elections – has identified savings options of £2.6m.These include:
£500,000 through increasing income from Manchester Contracts, the Council’s highways construction arm which works for both public and private sector colleagues.
£350,000 through increased advertising revenue from council-owned sites
£300,000 through increasing income from Manchester Fayre, which provides school meal services
Up to £222,000 Communications savings through reducing support for services and events and increasing charges to external organisations for support
£150,000 through funding discretionary Council Tax Support from Council Tax collected rather than setting aside a separate budget for it.
£126,000 saving through a slight reduction to the opening hours of the Council’s Benefit Service call centre and Customer Services call centres, which has seen a reduction in call numbers and more online enquiries.
£100,000 by ending Council telephone surveys and removing one full-time post.
Budget timetable and consultation
Before the Council makes any decisions, it wants to hear and consider the views of Manchester people on its overall approach, specific budget options and even ideas for potential alternatives.
Proposals will be considered at various scrutiny meetings, starting on 26 January, a special budget Executive meeting on 17 February and Finance Scrutiny on 25 February. The final budget will be set at the Council meeting on 4 March.
For further information and to have your say visit: www.manchester.gov.uk/budget
The formal consultation will run until 19 February 2016