Manchester bosses vow to balance budget despite £20m projected overspend

Manchester council’s finance chief says he is confident the town hall will deliver a balanced budget - despite a projected £20m overspend. A report to the authority’s executive laid out the stark reality facing the town hall, highlighting an expected £8.7m overspend in children’s services.

The report, tabled by city treasurer Tom Wilkinson, said: “The biggest pressure continues to relate to external residential placements for looked after children. “Placements are 16 higher than the number assumed in the budget and there is increasing complexity of need of the current cohort, with nine placement currently costing over £10,000 per week.”

There is also a shortfall in the unaccompanied asylum-seeking children grant from the numbers now being accommodated and increasing demand for home to school transport. Meanwhile, adult social care is projecting an overspend of £10m and there are also ‘pressures’ across the learning disability services.

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There are extra costs of £2.9m because of a shortfall in fair funding for homelessness. In Manchester, routine B&B usage for homelessness has ended with only a handful of placements made on any given night in emergency situations. Executive member for finances and resources Coun Rabnawaz Akbar pointed to the last government’s cut in financial support of 3.4 per cent in funding until 2029.

He said the current Government had upped the ante by 3.2pc with multi-year settlements deals in the offing for 2026/27 onwards, with Manchester funding settlement due around December. “We can't lose sight of the projected in-year overspend of £20m in the most demand led services. It's well documented that local authorities up and down the country have been grappling with their finances,” he said.

“We have long-term issues relating to social care, external residential placements for looked after children and the shortfall in homelessness funding. These are system failure crises and cannot be undone in one [national] budget. We are looking at a long-term solutions to fix these challenges. We are confident we well get improved funding from the Government.

“We have been looking at options which will be presented to the December scrutiny committees, but we are confident we will deliver a balanced budget for 2025/26 and that we will deliver the cities priorities and the essential services needed for the most vulnerable people in the city.”