Manchester City Council has published its proposed budget for 2013/14, setting out how it will address a £40 million funding shortfall over the next financial year, rising to around £80m in 2014/15.
The Council's financial position, and proposals for dealing with it, are set out in a series of reports to be considered by its Executive when it meets on Wednesday 23 January.
The Council has already had to make £170m of savings between 2011 and 2013. Now, following the latest financial settlement from central government, the Council must address a further funding gap of around £80m by 2014/15.
The £80m is accounted for by a combination of around £50m in central funding cuts and £30m in unavoidable cost pressures caused by factors such as inflation, a growing population - with extra demands on services for older people, people with learning disabilities and those with mental health and physical disabilities for instance - and increased levies on the council from transport and waste disposal authorities which the settlement from government does not take into account.
In the financial settlement for 2011-13, Manchester was the fifth hardest hit local authority in the country despite having the fourth highest level of deprivation. This time round, using the government's own Spending Power calculation (which understated the real level of cuts) a reduction of 8.2 per cent over the two years 2013-15 - has been handed the biggest percentage cut of any of England's core cities (the eight largest cities outside London), the biggest in Greater Manchester and the largest of any large metropolitan area outside the capital.
Sir Richard Leese, leader of Manchester City Council, said:
"Manchester has again been one of the places hit the hardest by the government's financial settlement.
"It is inescapable that the funding gap we have been left with, coming as it does on top of the severe budget reductions imposed on us in the previous two years, means the Council has to make very real cuts and at the same time make fundamental changes to the way it operates.
"There are glimmers of light in the gloom through new and innovative ways of working and through some well planned investment. Imaginative restructuring of services to promote better integration will mean better outcomes for many of our most vulnerable residents.
"We are absolutely committed to doing the best we can for Manchester residents and the businesses that provide jobs for them given the extremely difficult hand we have been dealt. Our priorities remain to support and protect the most vulnerable residents while continuing to show leadership by investing in the future to promote the economic growth, job creation and skills development which will underpin the city's future success."
It is proposed that as part of the budget package the Council Tax freeze will end.
Council Tax revenue is used to fund city council services and levies for waste disposal and transport. The financial position after the latest settlement means the Council can no longer absorb the rising cost of the levies and is proposing to fund part of the increase through Council Tax. However, the increase is being kept as low as possible and the amount of Council Tax used by the Council to support its own budget will actually decrease by 2.45 per cent.
The impact of the levies, though, will mean a Council Tax increase of 3.7 per cent in 2013/14, excluding police and fire precepts. This would be equivalent to around a £2.68 a month increase for an average Manchester council taxpayer. As part of the proposals, it is planned to offer 12 monthly payments rather than the current 10 to help spread the cost.
Manchester has frozen its Council Tax for the last three financial years and has kept any increases at or below inflation for more than a decade, leaving it with one of the lowest average council taxes in the country. Even taking into account the proposed rise, it would remain one of the lowest average bills nationally.
Details of how the proposed directorate savings will be achieved are contained in a series of Executive reports.
For Neighbourhood Services, savings of £12m have been identified for 2013-15. The service remains committed to supporting safe, clean and sustainable neighbourhoods with a high quality, accessible network of facilities such as parks, libraries, leisure centres and other sports facilities.
An analysis of swimming pool usage in the city shows that excluding school use and lessons, the average number of users is low. Experience from elsewhere shows that a smaller number of well-located modern facilities should increase usage.
The Council will make a one-off capital investment of £10 million in modern replacement facilities for Chorlton/Withington (to open at Hough End in spring 2015) and Levenshulme (to open spring 2015) alongside an already-funded new pool in Beswick (to open autumn 2014).
However, under the proposals four of the current Manchester pools - Broadway, Levenshulme, Miles Platting and Withington - will close in 2013. All are old and in poor condition and the move would avoid high ongoing maintenance and running costs. Chorlton Leisure Centre would remain open until a new facility is in place because it is essential to support the school swimming programme for South Manchester.
The Council has invested heavily in libraries in recent years, with 65 per cent of the library network significantly improved. Its library strategy for 2013/15 will ensure that the council meets its obligations to provide a high quality, accessible library service with a network consisting of a transformed Central Library and 13 neighbourhood libraries.
It is proposed to replace six smaller libraries with outreach libraries or community book collections in alternative community premises, with some ICT provision as we have already done in Clayton and Northern Moor and are doing in Barlow Moor. These would be managed by a community group or partner organisation. The libraries affected are Burnage, Fallowfield, Miles Platting, New Moston and Northenden. Levenshulme Library is proposed for closure but a new library facility for Levenshulme will share a building with the new leisure centre.
Some 99.9 per cent of Manchester residents will still be within two miles of a library, and almost 85 per cent within one mile.
It is proposed that lunchtime opening, which had been withdrawn at all libraries in 2011, will be reinstated to the neighbourhood libraries to improve library access.
Among the other proposals are a range of changes designed to increase recycling levels as the amount of waste sent to landfill has significant financial as well as environmental cost. Residents can help by maximising the amount they recycle. Other changes include reducing the frequency of green bin collections from September through to March to fortnightly and reducing the number of free bulky waste collections to one a year.
Also under consideration is either charging to attend annual bonfire events or ceasing to hold them altogether.
It is aimed to more actively pursue bus lane enforcement, with money raised reinvested in environmental, highways and transport improvements. Similarly, we aim to make on-street city centre parking more competitive with new spaces created and parking zone pricing adjusted from June to support improved traffic management. Some prices will go up, balanced by others coming down with a broadly neutral impact on the average charge across the city.
However, the biggest changes are in Targeted and Specialist Services. The Council's existing Children's Services and Adults directorates, together with the Public Health function which the council will take on from April this year, will be integrated into one service.
This will enable economies of scale as services integrate the commissioning and delivery of services for families with an emphasis on early intervention and prevention and make the process simpler and clearer for those who receive services. Tackling issues early before more costly interventions are required later will deliver savings and help improve people's life chances.
The proposed 2013-15 savings for this service are £41.5 million after £11.5 million to meet the demands of population growth has been factored into the budget.
The changes are part of a service reform agenda, exemplified by the Manchester Investment Fund, which is improving the co-ordination of services across organisations to ensure that scarce resources are used as effectively as possible to tackle deep-seated issues such as troubled families and save money by helping them turn their lives around.
For the Corporate Core, which includes departments such as finance and personnel, legal, procurement and corporate property, savings of almost £15 million have been identified.
The savings include those which will be achieved by reducing the number of properties which council staff are based, especially as staff move back into the town hall extension which is currently being extensively refurbished to increase its capacity and improve the services delivered from it.
Communications savings will be made through efficiencies, maximising income, reductions to events funding and collaboration with partners, such as Greater Manchester Police on printing. Other savings include a projected £1.44 million on ICT through contract savings and restructuring.
The Council anticipates it will need to lose around 830 full time posts, on top of more than 2,000 lost in the previous two years. It is aiming to avoid compulsory redundancies by achieving this through a programme of voluntary severance and voluntary early retirement.
Councillor Jeff Smith, Executive Member for Finance, said: "The last time we had to make savings on this scale, the severity of the settlement came as a shock. This time we were braced for it and have been planning for some time the new ways of working which will help mitigate against the worst effects of the reduction in our funding and help us plan for the future.
"But those savings come on top of the significant cuts we have already had to make and there is no way to achieve this through efficiencies and innovations alone.
"This has necessitated some painful decisions, not least the proposal to increase Council Tax. We know times are tough for Manchester residents and have consistently kept bills down for more than a decade which is why we have one of the lowest average council taxes in the country. But the severe financial pressures we face mean this is no longer sustainable and we have to look at a rise as part of our package of proposals.
"I'd stress this is just a draft budget and, just as we did last time, we will listen carefully to people's views before putting forward definitive proposals. But this scale of saving is not optional and that means the cost of any changes we make to these proposals will have to be found elsewhere."
A consultation with residents and businesses on the budget proposals and priorities set out by the Council will be launched today, Wednesday 16 January. In addition, consultations on a number of specific proposals will be launched from Wednesday 23 January. See manchester.gov.uk/consultations for details. Firmed up budget proposals will be put forward at the Executive meeting on Wednesday 13 February with a definitive budget to be approved at the Council meeting on Friday 8 March.