Council tax could rise by FIVE PER CENT
COUNCIL tax in Manchester could rise by almost five per cent next year as the council continues to grapple with the economic fallout from Covid.
Town hall bosses say the move, which would be taken with ‘a heavy heart’, could raise £8.5m to prevent cuts to frontline services such as adult social care.
The government is allowing local authorities to increase council tax by just under two per cent, plus an additional three per cent to meet social care demands.
Manchester had been staring at a £105m funding black hole in its finances for 2021/22 having seen care costs rise and income fall during the pandemic.
The blow on the council’s coffers has been softened by the announcement of one-off government funding, which has led to a ‘worst case scenario’ being taken off the table.
But a brutal catalogue of cuts worth around £52m, which could see hundreds of jobs lost and support withdrawn for the city’s most vulnerable, is still on the cards.
Sir Richard Leese, leader of Manchester council, said: “We recognise that these are difficult times for many people, so it is with a heavy heart that we are considering these increases.
“As ever, support will be available for those with the lowest incomes.”
The extent of the proposed cuts will depend on whether or not the council tax rise is taken up by city leaders.
Adult social care costs, inflated by Covid, are expected to rise to £13m in 2021/22. But an increase in council tax will raise around £5m of this.
The town hall is also missing out on £134m in lost income from the Manchester Airport dividend, as well as dwindling council tax and business rates collections.
Around £22m is expected to be given to Manchester as part of oneoff funding announced in the spending review, but the council has warned that it will fall short of plugging the gaps.
With the government only offering a one-year funding settlement – the details of which have to be announced – local authorities across the country are also struggling to set long-term budgets.
A public consultation will allow residents to have their say on the proposals until Christmas Eve. A separate consultation on the potential savings will take place in early 2021.