Levelling up: Greater Manchester councils have lost millions in spending power and funding

Levelling up may occupy a prominent place on the political agenda at the moment, but Greater Manchester councils have faced years of major cuts to funding and spending power, data shows.

The Government has spent some time talking about its levelling up agenda and debate has been swirling since the publication of its white paper on the subject on 2 February.

But analysis of Government figures by our sister title NationalWorld shows that this desire to help struggling communities and areas comes after years of sustained reductions in the funding and spending power of Greater Manchester’s local councils.

Millions of pounds have been shorn from budgets across the city-region’s 10 local authorities, money which could have been spent on a wide range of services including some of those which are strongly linked to the Government’s levelling-up ambitions.

Which figures for Greater Manchester councils have been looked at?

The figures look at the change in councils’ funding and spending power between 2015-16 and 2020-21.

Although council budgets had been reducing for some years before 2015-16 it is not possible to compare directly statistics from before that year as there were changes to how the financing system worked.

The figures on funding are the “funding settlement assessment”, which is one way of measuring how central government supports councils and is made up of the Revenue Support Grant and business rates.

Local authorities also receive some other specific grants but the government does not count these within its methodology for assessing the financial support it provides.

Spending power measures the resources councils have from their funding settlement assessment and what they raise from council tax. Some other specific grants, such as the New Homes Bonus, are also included within this.

There is also data available on the change in expenditure by local councils between 2010-11 and 2020-21.

All figures have been adjusted for inflation and come from either the House of Commons Library or the Department for Levelling Up, Housing and Communities.

What does the data show on funding?

The data shows that between 2015-16 Manchester City Council had a reduction in funding of £113,735,023.

This was the biggest fall across the 10 Greater Manchester authorities in real terms but was the smallest percentage change, at 32.4%.

Manchester also saw the biggest fall in funding per person, at £204.65.

All 10 councils are nursing eight-figure reductions in funding from the Government, with the smallest drop in absolute cash terms being the £20,926,532 fall experienced in Bury.

Stockport, though, has had the biggest percentage trim to the funding packages coming from Westminster, losing almost half of its funding.

It saw a 48.2% reduction as it lost out on £47,615,212 of funding coming its way between 2015-16 and 2020-21.

What does the data show on spending power?

Between 2015-16 and 2020-21 the worst-hit Greater Manchester council for spending power was Wigan, which found itself taking a hit of 11.4% on the amount of cash it had to splash on services.

In cash terms that was a reduction of £22,779,585 over the time period.

The biggest fall in spending power in absolute cash terms was in Manchester, which lost £31,966,999 (a 7.6% reduction).

The smallest reduction was in Salford, which was trimmed of £5,971,434 of its spending power, a fall of 2.4%.

What does the data show on expenditure?

Data on changes to council expenditure between 2010-11 and 2020-21 show huge differences in the total amounts which have been spent by Greater Manchester’s local authorities.

Salford saw a massive drop in expenditure of 28.5% over the decade, a change of £123,191,275 in cash terms or £468.95 per resident.

Manchester reduced its total spending over the 10 years by just under a fifth, with expenditure in 2020-21 down by £182,491,359 compared to 2010-11.

There were also reductions of more than 10% in Bolton, Oldham, Rochdale, Tameside and Wigan.

Trafford was the least affected in terms of expenditure, with a drop of 2.7%.

However, this is still a seven-figure reduction in absolute cash terms in expenditure over a decade, with a fall of almost £6.5m.

This data only shows the amount spent, with money recouped from charges or fees not included, and spending on education, public health, fire and police is also excluded.

Why does this matter for levelling up?

Councils in England are responsible for a huge range of local services touching every aspect of people’s lives, from education to housing, leisure to health, culture to street cleanliness.

And many of these services are directly relevant to the Government’s levelling up ambitions.

Ministers have talked about a range things which can come from council-run services, from supporting adults to gain new skills or improve their literacy to ensuring children get a good start in life and providing sports and recreation facilities to keep residents healthy.

And the cuts to government funding and reductions in town hall spending outline above have meant swingeing programmes of cutbacks to services in recent years as local authorities have had to save money.

NationalWorld’s analysis of Department of Levelling Up, Housing and Communities data shows council spending on day-to-day services across England as a whole fell by £6.7 billion, or 8.5%, in real terms, between 2010-11 and 2020-21.

What has been said about reductions to local government funding and spending power?

A leading think tank said the Government needs to act now to restore spending power and funding to councils if it is serious about its levelling up agenda.

Jonathan Webb, senior research fellow at IPPR North, said: “Local authority finances are the elephant in the room following the levelling up white paper.

“After a decade of central government’s austerity - which was an appalling failure, disproportionately eroded the resilience of local government in the North, and actively harmed far too many people, especially those who were vulnerable - a commitment to reverse austerity and to provide the investment need to realise ‘levelling up’ was missing in this long awaited white paper.

“Although many of the ambitions set out by government this week are a step in the right direction, none of them will be achieved without an acknowledgement that austerity has failed, and action to reverse it.

“The government should put its money where its mouth is, immediately.”

The Department for Levelling Up, Housing and Communities did not respond to our sister title NationalWorld’s request for comment.