Financial pressures being experienced by the Council in the current year – 2024/25 - are set out in a report to its Executive, which meets on Wednesday 11 September.
Councils across the country are facing rising costs, especially around social care, and increased demand for care services. This has meant that in-year spending for this year is exceeding the available budget.
The report reveals that based on the first four months of the financial year, the Council is facing a projected overspend of £17.4m by the end of 2024/25. But plans are being put in place to bring that figure down over the months ahead. It has already come down somewhat due to extra grant funding and underspends in some departments partially offsetting it.
The projected overspend is largely driven by rising care costs, with Adult Social Care forecast to be £9.8m overspent by the end of 2024/25 and the Children’s Services directorate £9.2m over budget for the year.
For Adult Social Care the key things behind the projected overspend are cost pressures from long-term care placements.
For Children’s Services the biggest pressure is increased external placement costs for looked after children. Other factors include increased demand for Home to School Transport.
Any in-year overspend at the end of 2024/25 will have to be met from the Council’s General Reserve Fund. This would have a knock-on impact on future budgets as the reserve would need to be replenished.
Cllr Bev Craig, Leader of Manchester City Council, said: “Councils across England face a tough financial situation on the back of 14 years of cuts and underfunding from central government.
“Recent Local Government Association analysis shows that English councils face a £6.2bn funding gap over the next two years. While we are working hard to manage the challenges locally, there is clearly a much wider structural issue here.
“We will be making the case to Government ahead of the Comprehensive Spending Review for long-term, sustainable funding which not only enables us to deliver services and support the most vulnerable but also to help our city and its people to thrive.”
Cllr Rabnawaz Akbar, Executive Member for Finance, said: “Rising costs and increased demand for essential high-cost care services mean that we are experiencing the same unfunded pressures as councils up and down the land.
“We have put mitigation plans in place to reduce the projected overspend on our revenue budget so hopefully our actual overspend at the end of 2024/25 will be less.
“Careful financial management over the years, which has involved taking some tough decisions, means that we have – with difficulty – managed so far. But this is not sustainable and we need a new approach from central government so we can look ahead with confidence.”