THREE GREATER MANCHESTER COUNCILS SET TO BE COLLECTIVELY OUT OF POCKET BY OVER £100 MILLION DUE TO ‘BLACK HOLE’ IN FINANCES

Manchester, Salford and Wigan Councils all have projected budget deficits in the millions for 2025/26, according to a BBC Shared Data Unit investigation. This means they will need to reduce spending where possible or break into their reserves in order to balance the books.

Unison warned that some councils across the country will not be able to provide basic services due to the £5 billion ‘black hole’ found in public finances.

The Local Government Association said inflation, the Living Wage and energy costs were adding billions to budget books. Together, the 190 authorities surveyed said they would need to find £5.2bn to balance the books by April 2026 – even after making £2.5bn of cuts this year.

Every single council in Greater Manchester has committed to use up their financial reserves in order to balance the budget for 2023/24.

Manchester

In Manchester, the predicted cumulative shortfall for 25/26 is £40m which is 5.4 pc of the net budget. This means the predicted deficit per person is £134.24.

Manchester City Council explained their deficit would be far higher if not for shrewd investments. They have labelled government funding of councils ‘unfair’.

A Manchester City Council spokesperson said:

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“Since 2010 we have had to make more than £428 million of savings to cope with unfair government funding cuts and pressures such as inflation and population growth which government funding has failed to keep up with.

“We have already put forward £36m of savings for the three years 2023/24 to 25/26 and committed to the use of £17m reserves. Without this sound financial management we would be looking at a much bigger £93m cumulative deficit by 2025/26.

“We will still need to identify further savings in the years ahead but we also need fairer government funding which reflects the challenges facing us as we try to help the city through the impacts of austerity and the cost-of-living crisis.”

 

Salford

The predicted cumulative shortfall for 25/26 at Salford City Council is £36.35m, which is 14.9 pc of the net budget. This means the predicted deficit per person is £134.24. 

Wigan

Wigan’s predicted cumulative shortfall for 25/26 is £32m, according to BBC Shared Data Unit statistics, which is 12.7 pc of the net budget. This means the predicted deficit per person is £97.04. 

However, the council have stated that their estimation of the shortfall number is actually slightly less at  £26.7m.

Councillor Nazia Rehman, portfolio holder for finance, resources and transformation at Wigan Council, said:

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“Like councils up and down the country we continue to feel the pressure of budget restraints and urge the Government to find a more long-term solution for the funding of local authorities and the invaluable services we provide for our residents in their everyday lives.”