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REVEALED: Airport Dividend To Ease £59m Budget Cuts

City Council to use money from 55% stake in Manchester Airport to soften huge budget blow

Published on January 8th 2015.

REVEALED: Airport Dividend To Ease £59m Budget Cuts

ON 12 November 2014, Confidential published a bleak article detailing how 600 jobs could be lost as Manchester City Council faced up to a further £59m in budget cuts - read here.

"This is not a good news story – it’s almost £50m of cuts in 2015/16 rather than almost £60m." 

The news followed £250m of previous budget cuts between 2011 and 2015 after deep reductions in central government funding, with the potential to rise to £91m by 2016/17.

Manchester City Council had good reason to grumble.

Manchester, despite having the fourth highest level of deprivation in the country, was to bare the brunt of the eighth biggest spending cut per resident of all councils in England.

Manchester has seen its funding per home cut by £253.76 – the highest figure in all of Greater Manchester – compared with only £62.57 in Trafford and as little as £14.81 per home in the South East.

To offset the £59m in cuts, the Council have announced their intention to use £9m of the £11m interim dividend gained from their 55% stake in Manchester Airport.

Manchester Airport Group (MAG) announced £421m of revenue and £117.6m operating profit between April and September 2014. The City Council received £11m of a £31m dividend paid to shareholders, while the other nine councils within the Greater Manchester Combined Authority received £1m each.

The Council owns a 55% stake in Manchester AirportThe Council owns a 55% stake in Manchester Airport

The Council now faces up to £50m in 2015/16 rather than £59m (well, it's a start). The remaining £2m from the interim dividend will go towards supporting the 2016/17 budget.

Airport dividend or not, it's still grim news for the Council's workforce, with up to 550 full time posts still expected to go (accounting for almost 20% of the required savings).

Sir Richard Leese, leader of Manchester City Council, said: “Manchester has faced successive unfair financial settlements from this government which have made delivering services to the city’s people ever more challenging.

"This is not a good news story – it’s almost £50m of cuts in 2015/16 rather than almost £60m - but the extra money through our stake in the airport has at least allowed us to look again at the budget options we had announced in November.

“The picture has changed and we want to give people the most up-to-date information. We still need to hear their views which will inform some of the difficult decisions we still have to take around the forthcoming budget.”

In the updated provisional 2015/16 budget - which is still subject to consultation - it was announced that £3.5m could be made available to the Childrens and Families directorate and just over £1m to bolster the city's cleaning, waste and recycling programme.

The draft budget also included:

- A reduction in funding to advice services by £615,000 rather than £915,000.

- a redesigned community grants scheme to avoid ending CASH grants for community projects.

- A case-by-case review to avoid cutting 40 out of 95 school crossings.

- Maintaining free swimming for under-16s and over-60s.

- £440,000 to help attract investment in parks.

- £200,000 to tackle noise nuisance and anti-social behaviour.

Councillor John Flanagan, Executive Member for Finance, said: “We are determined to do the best we can for Manchester people with the limited resources available to us.

"The scale of cuts to our funding mean some very difficult decisions about service reductions will have to be made."

Those that want to give their views on the budget options have until 18 February to do so. For more information visit: www.manchester.gov.uk/budget

The draft budget will now be considered by the council’s various scrutiny committees. The final budget will then be decided by full council at the start of March. 

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20 comments so far, continue the conversation, write a comment.

AnonymousJanuary 8th 2015.

Pretty disgraceful behaviour by the government that tells you everything you need to know about their values, targeting the most deprived communities for the largest cuts. I think we're beginning to see some high profile impacts of cuts to council services with the recent chaos at NHS A&E departments - hospitals being unable to discharge healthy patients due to a lack of social care provision in local communities.

3 Responses: Reply To This...
AnonymousJanuary 8th 2015.

The local labour council in manchester underspent by £50m last term.

Not that David!January 9th 2015.

Thanks Kev

Duke FameJanuary 11th 2015.

Local authorities need to prioritise and manage better. Whilst they have so many indulgent services, there is clearly plenty fat to cut out. So much taxpayer's money has been wasted, especially by Dickie Leese and his team, lets cut services to the core, save money and allow people to choose to spend as much of their hard earned money however they wish.

AnonymousJanuary 8th 2015.

Sometimes I dream about a pothole free city.

2 Responses: Reply To This...
AnonymousJanuary 8th 2015.

Sometimes I wish cars and leaves wouldn't grind metro to a halt. Oh for an underground :(

potatoJanuary 8th 2015.

When have leaves ever ground the metrolink to a halt? Moaning wingbag.

AnonymousJanuary 9th 2015.

From the Manchester City Council website - Climate change presents one of the biggest global challenges of our time, but many of the solutions are local. Manchester, like other cities, has a pivotal role to play in tackling climate change and enabling sustainable living. We recognises the importance of tackling climate change both in terms of reducing greenhouse gas emissions to minimise future global climate change and planning for the unavoidable local impacts of climate change. So what exactly is the council doing in the airport industry, participating fully in an industry which is notorious for high CO2 emissions?

2 Responses: Reply To This...
AnonymousJanuary 9th 2015.

Bringing Jobs to its voters...

AnonymousJanuary 9th 2015.

They are trying to stop millions of journeys to London airports by people from the north west. People need to fly. If you can fly from your local airport instead of being made to do a 400 mile journey south then that's a very green thing to do.

Kevin PeelJanuary 9th 2015.

This is welcome but we still face some horrendous decisions. Councillors are engaging with our residents and local community groups and making the case for areas we shouldn't be cutting. I would really urge all your readers living in the city to respond to the consultation and also contact councillors if you feel strongly about a particular service or project.

7 Responses: Reply To This...
AnonymousJanuary 9th 2015.

Stop squandering millions on useless glass boxes in Library Walk and the like perhaps? £3.5 million would have gone some way to easing the cuts. I feel strongly about it btw...

Kevin PeelJanuary 9th 2015.

1) I didn't - in fact I spoke against this decision alongside city centre colleagues. 2) Even if this decision had been overturned this is money from the capital pot which can't be used on anything other than capital investment due to the weird laws of local government finance.

AnonymousJanuary 9th 2015.

1)But you are connected to a party that did wave this ill thought out scheme through aren't you? 2) never heard of creative accounting? 3) Did it never occur to anyone on the council that spending £3.5 million on a useless glass box that ruins a much loved space and then they go bleating on about austerity and complaining about cuts isn't going to go down well with the electorate?

AnonymousJanuary 10th 2015.

I really hope this monstrosity is ordered to be removed as the council had no permission to build it. Hideous.

AnonymousJanuary 10th 2015.

Who was responsible for it Kevin? Spill the beans.

Duke FameJanuary 11th 2015.

Well Kev, you may not be able to splash £1/2m on an Alicia Keys concert this year, perhaps if you saved that money you'd have to make fewer "horrendous decisions"

AnonymousJanuary 12th 2015.

what is this library walk thing that a couple of people keep mentioning?

James CunninghamJanuary 9th 2015.

Kev... I'm a Labour party member and disgusted by the Westminster cuts once more.. but even I am disgusted by the state of our roads.. which have been like this for years and even under a Labour govt.. they have wrecked the steering in my car and are a deplorable welcome to any tourist visiting our city.. one thing this council should hang its' head in shame for.

1 Response: Reply To This...
AnonymousJanuary 10th 2015.

They keep filling holes and redoing the top 2/3 inches of tarmac. And they are all stop gap measures. If they did roads properly they would last decades.

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