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GREATER MANCHESTER: Essential services could become luxuries as council debt woes increase

The essential day-to-day services such as bin collections, children’s services and social care many expect to be the norm could soon become a luxury if things do not change.

Councils across Greater Manchester are becoming increasingly stretched with their budgets each year and have pointed the finger firmly in the direction of central government funding. Although no councils in the region have confirmed they are at risk of going bankrupt, a section 114, they all speak of ‘increasing pressures’ which need to be addressed.

Councils are expecting to spend their reserves when announcing their budget plans for the upcoming year, as they have done in previous years prop up their budgets – which legally need to be balanced annually.

Council’s funding goes towards a number of local services such as bin collections, adult social care, children’s social services and various community projects many taxpayers grow up expecting. 

Neighbouring Stockport Council has demonstrated the level of desperation councils recently by revealing their discussion over introducing charges for refuse collection, but eventually decided against. This is a common trend in budget announcements from local authorities who highlight the good work done simply to keep a service alive – rather than highlighting its successes.

Tameside Council explained that Children’s Services placements costs have risen by 54 per cent between 2015 and 2020 – but the money to match these rising costs is not on the horizon. With councils saying hundreds of millions being taken from their budgets over the last decade, their financial position is becoming unsustainable.

However, the Levelling Up Secretary Michael Gove announced last week that councils across England will receive a £600 million support package to help them deliver key services. The support package will primarily see an additional £500 million added to the Social Care Grant to bolster social care budgets, a key concern raised by councils.

How this will be allocated is yet to be determined though. The further £100m comprises an increase to the Funding Guarantee from 3 per cent to 4 per cent and a variety of other pots of money.

Following the announcement, Levelling Up Secretary Michael Gove said: “We have listened to councils across England about the pressures they’re facing and have always stood ready to help those in need. This additional £600 million support package illustrates our commitment to local government.

“We are in their corner, and we support the incredible and often unsung work they do day-to-day to support people across the country.”

Here is what each council has said on their financial position…

Bolton

A spokesperson for Bolton Council said: “Like all local authorities, Bolton Council’s budgets have been under significant pressure in recent years. However, we continue to protect the essential frontline services that support the most vulnerable members of our community.

“Whilst the recently announced £500m funding pot is welcome, it is a one-off allocation and we await official guidance on how it can be used towards the recurring and increasing social care pressures.

“Residents should be reassured that council finances remain robust and there is no imminent risk of a Section 114 notice being issued.”

Manchester

Coun Rabnawaz Akbar, executive member for finance, said: “While any extra money for local services is obviously welcome, £500m of one-off funding split between hundreds of councils will not go very far and will fail to address the underlying financial pressures faced by councils after years of cuts and underfunding.” 

Manchester Council wanted to stress that although they are not complacent, they are not one of the councils currently in section 114 territory ‘due to careful planning over the years’. 

Oldham

Coun Arooj Shah, leader of Oldham Council said: “As it stands this money (£500m from Levelling Up department) doesn’t change a thing for Oldham. The reality is we still don’t know how much we’re going to get out of it and we’re left in limbo while the Government continues to ignore the LGAs calls for sustainable multi-year settlements.

“We’re in the middle of our budget consultation process here in Oldham, working towards balancing our budget ahead of taking it to Full Council on February 28th and we’re not in Section 114 territory but that doesn’t mean things are easy and we don’t have to make difficult decisions.

“Currently, 60p in every pound the Council spends goes towards looking after the most vulnerable, which includes adults and children’s social care, this ensures that your elderly relatives get the care they need and our children are protected.

“If the government doesn’t get a proper grip on local government and social care funding it’s going to be even harder to protect those who need it most whilst also delivering the day-to-day services that people expect from their local council, like keeping the streets clean and emptying the bins.”

Rochdale

Coun Carol Wardle, cabinet member for finance at Rochdale Council said: “Our 2024/25 budget allows for increased costs in adult social care to cover the Real Living Wage increase, higher costs in children’s services plus the increasing costs of social care and special educational school placements. 

“These add £3.6m above estimates and the recent announcement of additional funding is significantly below what is required so we plan to use £2.4 million of our reserves to fund additional costs in children’s services along with a corporate efficiencies plan, and while there is no risk of a section 114 notice being issued, at present the future financial position remains uncertain.”

Salford

Paul Dennett, City Mayor for Salford said: “It’s shocking what the Government has done to local government resourcing since 2010/11. We know central government and the treasury has cut the support grant to councils in England by more than £4.6 billion, while forcing councils to hike council tax and the adult social care precept by more than £14 billion since 2015/16 if councils are to realise the government’s core spending calculations.  

“There is a reliance on regressive forms of taxation such as council tax and precepts to try and keep the national debt of the country down but even then they’re massively failing, as national debt has reached over £2.67 trillion.  

“The politicisation of local government financing is wholly unacceptable, especially as we continue to grapple with 14 years of austerity, which will have seen £245 million cut from the budget since 2010/11, while we continue to try and mitigate the on-going impacts of the pandemic and more recently the impacts of the cost-of-living crisis.”

Stockport 

Lib Dem Coun Mark Hunter, leader of Stockport Council said: “There will be a council tax increase this year, we’ve never made any secret of that and it will be consistent with what you’ll be seeing in other areas.

“We’ve got prudent levels of reserves in Stockport, we’re always very cautious financially, and I think we’ve been a well-run authority for many years.

“The bigger challenges are coming down the track in subsequent years, there’s no doubt about that. There’s going to be savings, we’ve got to balance the books and we will do that.

“We’ve been looking right across the range of services that the council offers. We’ve been looking at everything, nothing’s been ruled out.”

Tameside

Coun Jacqueline North, Tameside Council’s lead member for finance said: “Like all local authorities, Tameside Council is operating in an environment of reduced government funding and much higher costs for services. Our frontline services – particularly Homelessness and Children’s and Adults Social Care – are seeing rising demand for support, increasingly complex needs and a market for good quality placements being severely constrained.

“Evidence points to Children’s Services placements costs having risen by 54 per cent between 2015 and 2020, and these costs have continued to rise. The Council knows it is challenging to balance the budget – and it is worth noting local government is the only area of the public sector legally obliged to do so – but it is not insurmountable. 

“Tameside Council’s performance against the Office for Local Government’s metrics does not show a Council in financial distress, nor does the Council’s performance on the CIPFA Resilience Index. Whilst the Council recognises the scale of the challenge, to suggest that it is in financial peril at this point is incorrect.

“Tameside Council is committed to transparency around finance – the in-year financial position is reported publicly on a monthly basis, the budget setting updates are reported quarterly, and our consultation on the budget has received a significant increase in responses on previous years. The budget consultation remains open until Friday, February 2 – we’re encouraging people to find out more and take part here or ask for a paper version of the consultation at any of our libraries.”

Trafford

Council leader Coun Tom Ross said: “Trafford is one of the 20 worst funded councils in the country and, since 2010, we have suffered a 60 per cent cut in our budget in real terms and have had to close budget gaps totalling £288 million.

“It is absolutely vital that the Government comes forward and supplies the funding that local government needs. We’ve had announcements of fair funding reviews and business rates resets but they’ve just been empty promises. 

“We have put forward a motion to this Wednesday’s full council meeting calling on the government to fix the broken system of local authority finance. We need the government to act now – our children and vulnerable adults rely on us and we desperately need fairer funding to give them the help they need.

“We are not in section 114 territory, but it is a real struggle to set a budget for the next financial year and we can’t keep going on like this. Year after year this Tory government has squeezed local government finances and this needs to stop otherwise some of the most vulnerable people in our society will suffer.”

Wigan

Coun Nazia Rehman, portfolio holder for finance, resources and transformation, said: “As a result of careful financial management over the past decade, Wigan Council has been able to maintain services and continue delivering for residents despite significant cuts to our budget.

“Nevertheless, along with the LGA and local authorities across the country and in the face of increasing pressure on councils, we continue to urge the government to provide a long-term, sustainable plan that helps us manage and navigate the challenging financial situation we all face.

“Without such a plan in place, it is impossible for local authorities to have security for the future so that we can be confident of delivering the many services we provide to residents.”

Bury Council has been approached for comment.

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