Salford City Council has submitted key budget proposals for its budget setting meeting on Wednesday 24 February 2021 which despite the ongoing challenges the important message is that there will be no further cuts in the budget.
The budget proposals have been submitted in one of the most challenging years for local government financing in recent times as a consequence of the COVID-19 pandemic.
Throughout the past 12 months the council has pulled together with our NHS colleagues, care workers and the community and voluntary sector to support communities and the most vulnerable people across our city.
In order to achieve a balanced budget position for 2021/22 the council has addressed a £10.9m funding gap. This gap has been driven by the continuing impact of the COVID-19 pandemic and changes to funding streams such as the New Homes Bonus. The gap will be covered by a combination of previously approved savings, use of non-recurring funds and reserves.
The COVID-19 pandemic will continue to affect the council’s budgets for at least the next three financial years due to the impact of a deficit on the council’s collection fund in 2020/21.
The government has extended the period over which the impact of the deficit must be managed from one year to three years and has also committed to providing support to councils in meeting the associated financial pressures. Whilst this is welcomed, the amount received will depend upon the value and drivers of the deficit and it will not cover the full impact and this is reflected in savings targets for future years. The impact of the COVID-19 pandemic, cost pressures and anticipated changes to funding streams drive a savings target of £21.8m for the period 2022/23 to 2023/24 as set out within the medium term financial strategy.
The council has recognised that it is particularly difficult to accurately forecast past 2021/22 given the significant changes that are anticipated to be implemented in 2022/23. These include the introduction of fair funding, business rates reset and reform and changes to specific funding streams which means that there is a risk of significant annual changes in the projections which will need to be managed through the three year strategy.
The council is also managing pandemic-driven pressures with increased expenditure on services to support vulnerable residents and a loss of income through business rates, fees and charges impacting on future budget projections.
Salford City Mayor Paul Dennett said: “In setting this year’s budget Salford City Council will have seen its budget cut by £222 million since 2010/11 as a consequence of cuts to the central government grant and un-funded budget pressures, with the Local Government Association (LGA) also highlighting that councils have seen a £15 billion cumulative cut in Whitehall grants since 2010.
“Government is once again forcing local authorities to use regressive forms of taxation to hopefully balance their budgets rather than restoring Whitehall grants, which have been stripped away since 2010/11. The other week we were informed that 12 councils in England are in rescue talks with the government over their finances, with the Chief Executive of the Chartered Institute of Public Finance and Accountancy (CIPFA) suggesting that 12 councils is probably the “tip of the iceberg” in terms of the precariousness of local government finances following 10 years of austerity and the financial impacts of the COVID-19 pandemic for councils up-and-down the country.
“In addition to this we have still seen no green paper from the government on proposals to hopefully resolve the social care funding crisis, despite it being promised back in March 2017, and now nearly four years on local authorities are being forced again to increase the adult social care precept to raise necessary finances to fund social care. It’s truly shocking that government hasn’t prioritised resolving the social care funding crisis, especially given the critical role that our care workers have played in the fight against the COVID-19 pandemic, with government seemingly favouring spending time and resources on further NHS reforms and planning reforms, rather than tackling the scourge of poverty pay amongst our country’s care workers.
“I’ve always been very clear, simply de-funding local government and passing the burden of funding services onto our residents, many of whom are themselves struggling is no way to fund local government and it certainly doesn’t demonstrate a commitment to re-balancing the economy and levelling-up, despite the government’s rhetoric! Government should at least be fully compensating local authorities for the last 12 months and urgently resolve the social care funding crisis, nearly four years on from the government promising a green paper back in March 2017.
“Any decision we take to increase council tax we know will negatively affect the residents in our city, who have already sacrificed so much in the last twelve months. The government have once again failed to recognise the important role of local authorities and given us little choice, as we must continue to do all we can to protect services for the people of our city.”
Councillor Bill Hinds, Lead Member for Finance and Support Services said: “The COVID-19 pandemic has created additional pressures on council budgets up-and-down the country. It is only through the prudent financial decisions of politicians and officers, our use of reserves and the benefits of growth in the city that this year Salford City Council is not faced with more difficult choices.”
“Salford is ranked the 18th most deprived local authority in England according to the 2019 government’s Index of Multiple Deprivation (IMD) with approximately 30% of the population living in areas classified as highly deprived. The City Council recently responded to the consultation on the Provisional Local Government Finance Settlement 2021/22, as the government’s proposals were once again insufficient to address the needs of our residents, families and communities and the hardship faced by vulnerable people within the City. Similarly the Settlement for 2021/22 did not seek to reverse the scandalous budget reductions imposed during the period of Tory-Lib Dem and Tory government’s austerity, which has disproportionately impacted local government since 2010/11. Moreover, the recent central government Settlement for local government in 2021/22 has assumed a council tax bombshell for Councils in England to raise £1.9 billion from council tax payers in England, thereby shifting the burden yet again onto local council tax payers, with 87% of the projected additional core spending in 2021/22 coming from local council tax payers.
“The reluctance by government to recognise that their calculations have forced councils in England to increase council tax and precepts by burdening local council tax payers is abhorrent. Our deep concerns led to the passing of a Motion at Council in January 2021 highlighting our position and we have yet to receive a response from government. Despite our best efforts we have been given no alternative but to propose the increases in council tax and the adult social care precept to Budget Council.”
The budget report will be considered on 24 February and decisions will be made on increasing council tax by 1.99% and the adult social care precept by 2%.