Manchester faces a £41m 'cliff edge', and it's only getting worse

Money troubles that have dogged Manchester for years are only getting worse, a new report has revealed.

Earlier this year, Manchester arrived ‘at the cliff edge’, according to its top councillor for finance, Rabnawaz Akbar. Town Hall chiefs have regularly discussed difficulties in balancing the council's budget.

And forecasts on future ‘budget gaps’ — i.e. the amount the council expects to spend versus the amount of revenues it will take — have been grim for years. Officers estimate the ‘budget gap’ will be £41 million by 2026/27.

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Now, a report written for the council's resources and governance scrutiny committee estimates it will jump to £65m a year later. That's because the council expects 'directorate costs' to spiral from £704m this year to £799m by 2027/28, with only council tax receipts expected to rise.

That eye-watering ‘gap’ isn’t Manchester’s only cash problem, because the authority has seen costs surge in the social care sector, coupled with rising demand for social care services this year.

It means the ‘in-year overspend is £17.4m’, Coun Akbar said last week, prompting officials to find £50m of cuts last summer.

If those savings can’t be made, it means the council will have to rely on its rainy day reserve fund; a last-resort option that’s drying up.

Coun Akbar added: “We know things are still going on to reduce the in-year overspend. If it [remains] £17.4m then we will have less than £6.5m in the general reserve.”

That figure ‘is not enough for a city like Manchester’, he told a Town Hall meeting on October 10.

Officials have pointed out ‘disproportionate’ public spending cuts,