Manchester City Council faces £153m budget shortfall

Council leader Bev Craig said the council had lost £419m of funding in the last decade

Manchester City Council is facing a £153m budget shortfall over the next three years, councillors have heard.

A report to the Labour-run council said while government funding for 2022/23 was "less bad" than anticipated, cuts in spending may still be required.

The local authority intends to reduce its budget by about £40m a year and use £51m of reserves.

The council is now in a position "where a 'less bad' spending review is seen as positive", said leader elect Bev Craig.

The Local Democracy Reporting Service said the report to the resources and governance scrutiny committee predicted "an estimated shortfall of £4m in 2022/23, £64m in 2023/24 and £85m by 2024/25".

It said proposals to balance the 2022/23 budget had been made, subject to approval, and a "longer-term strategy to close the budget gap is being prepared".

'Quite frightening'

The committee heard the 2022/23 spending review was a bit better than anticipated, with some additional funding allocated from a 3% increase in spending power announced nationally.

However, the report stated that did not address longer-term funding for social care and other pressures as the increase was "front-loaded".

Ms Craig said the council had lost £419m of funding in the last decade and "then of course, there is the impact of Covid that we have seen in this city and the financial losses we've experienced".

"We find ourselves in a circumstance where a 'less bad' spending review is seen as positive amid the background of a decade of austerity," she said.

She added that a more detailed budget update would come in early 2022, once the government settlement had been fully announced.

Committee chairwoman Sarah Russell said the government "largesses" of the past year were "very, very temporary".

"How this pans out going forward is quite frightening," she said.

"This year it's not as bad as we're used to, but for how long?"

In July, a spokesman for the Ministry of Housing, Communities and Local Government said the government had handed about £12bn to councils during the pandemic.

He added that going forward, ministers would "take stock of the demands faced by councils and the resources available to meet them and will decide on the timetable for future funding reform".