Manchester Council’s Executive will be confronted by the news this morning that the impacts of the Covid-19 period – both through increased costs and lost commercial income mean the Council is currently facing a predicted shortfall of more than £100m in 2021/22.
This year’s budget has been balanced due to in-year savings and extra resources from Government but a lot of the effects of Covid will not be felt until next financial year.
There is also expected to be a significant and ongoing increase in social care costs as a result of the health and economic impacts of the pandemic. No further Government funding relating to Covid-19 is confirmed after this financial year.
As things stand, without significant Government support, the £100m+ forecast shortfall would equate to around a 20% cut in service budgets.
This comes on top of ten years of austerity which have necessitated that it make £379m worth of cumulative cuts and reduce the workforce by 40%, equivalent to around 4,000 full time staff.
A report setting out the Council’s longer term position and possible savings and other mitigations to address the budget for next year and beyond will be brought to November’s Executive meeting.
“When it comes to developing proposals to tackle this extremely challenging financial situation we will do this carefully, consultatively and with a clear focus on the people’s priorities for the city which were informed by a major consultation exercise. These are protecting the most vulnerable, delivering the best services we can and early help to support people so they can avoid getting into greater difficulties, all underpinned by inclusive and sustainable job creation. But no one should be under any illusions that this can be achieved without some very difficult decisions.
“All of this will require transformational changes to how the council operates and further progress in the drive to sustainably reduce the need for, and the cost of, some of the support services it provides.
“Raiding the reserves is not the answer. While this might get us through 2021/22 they would quickly run out afterwards and this approach is neither sustainable nor responsible as it would leave us unequipped to deal with further unexpected events.
“We won’t know the full extent of the financial challenge we are facing until later this autumn. But all the indications are that local government, despite its central role in tackling the coronavirus crisis and increasing responsibilities, will not be considered a priority.
“It is not reasonable for Government to expect us to rely more and more on Council Tax, Business Rates and commercial income at a time when these resources are dwindling and the costs for the services we deliver for Manchester people are increasing. We need a financial settlement from Government which recognises the crucial role the council plays at the heart of the city.”