Householders could see a rise in their council tax as Manchester City Council has today published details of options to make £13.8m of savings in its budget for 2016/17.

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 says that it 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.
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 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.
The Council has already had to make savings of £309m since 2011 and says that if Manchester had received the national average funding reduction between 2010/11 and 2016/17 the city would be £75m a year better off. 

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.” 

Other saving options for the coming year may include £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.

However the council maintain their 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.

Other savings include £1.3m through renegotiating arrangements where the Council is currently funding health responsibilities for intermediate care beds and medicines while the council expects £750,000 increased income from council-owned land and property and £400,000 through increased income from planning fees due to the city’s buoyant development sector.

Before the Council makes any decisions, it want to hear and consider the views of Manchester people on its overall approach, specific budget options and even ideas for potential alternatives.

 The formal consultation will run from 25 January to 19 February. In the meantime, people can visit www.manchester.gov.uk/budget to find out more. 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.

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