Before Christmas, Mike Wild (Chief Executive of Macc) and Nigel Rose (Macc’s Strategic Lead on Commissioning) met with Geoff Little (Deputy Chief Executive of Manchester City Council) and Carol Culley (Assistant Chief Executive, Finance and Performance). We wanted to discuss the impact not just of the next wave of public sector cuts but the prolonged effects of recession. We also wanted to explore the Council’s views on how the voluntary and community sector can rise to meet the challenges faced by the communities in Manchester.
What follows is not a report of our conversation but our reflections on what we heard.
Like all Local Authorities, Manchester City Council has to plan for the future far beyond what they actually know about the money they will get from central government. At the moment, we know that Manchester is facing another round of savage cuts in the funding it receives. The draft financial settlement for 2015/16 indicates a cut of £70 million and a further £30 million in the following year. Taken together with previous cuts this would amount to a more than 40% reduction in City Council directorate budgets since 2010/11. Discussions have started about how they might address the next wave of cuts and how they will engage the people of Manchester in these discussions.
The bitter irony is that despite these cuts the overall level of state funding in Manchester has not actually decreased. The cuts in Local Authority funding are eclipsed by a rise in benefit spending by central government.
There are some odd contradictions here: individual government departments are promoting ‘localism’ and devolving power and financial responsibility to local areas and a wider range of organisations (including providers and, through personal budgets, individuals). And yet at the same time, the proportion of public spending in Manchester over which the City Council has direct control is getting smaller.
As less money is spread more thinly, there is increasing fragmentation of planning and delivery of services. Unless that is addressed, it could lead to a vicious downward spiral. Manchester needs to be able to support local people in building the skills and knowledge which create future growth – and to keep them and the businesses they create here, while attracting new investment from elsewhere. Without this, we could see what would effectively be permanent local recession for most of the local economy even at a time when there are some signs of growth across Greater Manchester and nationally.
There has to be a different approach: in particular the City Council needs to build collaborative relationships with other key players, based around a shared strategy.
Part of the solution is about changing the relationship with central government. It’s already understood that discussions with government become much more significant when it is at a Greater Manchester – just as “London” has much greater weight than the individual London boroughs acting along. Manchester is working with the other English “core cities” (e.g. Liverpool, Birmingham) to convince central government to allow them the freedom to take the bold and radical steps needed to find a way forward. There may be relatively little that can be done about spending reductions enforced by HM Treasury but some of the impact could be reduced by unlocking the potential for locally developed solutions by giving local authorities the freedom and the power to work together to spend the money coming into local areas in a way that they believe will stimulate local growth.
The challenge for the City Council is to consider how it targets its limited resources. Most people in the city would acknowledge that some of the money that the city received in more affluent times was not always spent as cleverly as it might have been. Much of this money was used for “innovation” but that should not mean that innovation is no longer affordable: it’s actually the only way out of the dilemma. It has long been said that services need to refocus on prevention, helping reduce demand from those who cost the public purse most. The familiar example is keeping people from needing long term care by providing support which enables them to be as independent as possible. There is plenty of evidence that this approach works but to make the shift into prevention and early intervention, all the statutory authorities in Manchester (and Greater Manchester) will have to combine their resources in the most effective way: this means formal, solid business agreements far more substantial than the broad partnerships we’ve seen in the past.
There needs to be a continuing process whereby the key organisations in Manchester, of which many are from the voluntary and community sector come to a collective agreement and work in partnership to deliver a positive future for the city and its citizens. It should be inevitable that there is a shift in the relationship between Manchester City Council and the voluntary and community sector. The sector should start to be understood as even more central to the wellbeing of the city: through the resources it brings in from non- public sector sources, through volunteering and neighbourhood participation. Because of shrinking public sector budgets, the sector now represents a far greater proportion of spend in the city than previously.
However, it is a difficult time for many voluntary and community organisations: they are experiencing increasing needs at the same time as decreasing funding. They are seeing funding cuts at the same time as increased demands from funders. Many organisations are coping with losing staff, diminishing reserves and an uncertain future. Many voluntary organisations are wondering how they will continue to survive and how they will continue to protect the people they serve. There are voluntary sector organisations that have gone to the wall, others that have merged or are considering merging, new partnerships and alliances springing up.
It is a difficult time to be able to focus on the broader needs of the citizens of Manchester, but the voluntary sector has to rise to the challenge. This is not a new challenge as the sector has responded to recessions and downturns many times over the decades. The main challenge is to work out how to go about it. We believe the sector needs a strong voice in the future of Manchester so that we can all make sure that the people we work with and advocate for are included in the way Manchester responds to these cuts: it is our responsibility as a sector to ensure these marginalised and excluded voices are not pushed further away.
Mike Wild & Nigel Rose
January 2014