Canal27ways

Category: Finance

  • Setting Trafford’s Budget Pt 5 – Spending

    Setting Trafford’s Budget Pt 5 – Spending

    Essentially, spending is the very core of the budget process. We’re describing how much the council intends to spend and setting out to raise sufficient income to pay for it.

    Councils know there are limits to how much income they can generate, both in terms of the rules and in terms of democratic oversight.

    If Council Tax is too high, the voters will vote for a party that pledges to tax a more reasonable amount.

    Voters also expect to see the benefits of the taxes that the council is taking. They want clean streets, the bins emptying, roads maintained. But it’s not just the state of the place, they don’t want to learn that their elderly neighbour has starved because no one was caring for her. Voters get this, although I don’t think we make it easy for people to see where their money is going.

    So anyway, the council sets out its projected spend by service*. We’re only going to need look at two tables:

    • A chart comparing spend by service in the current year with that projected for the coming year in the draft budget
    • Page 84 of the Draft Budget which is titled ‘subjective budget analysis’, but is actually a single table detailing all the changes to spend and why they’re happening.

    *brief descriptions of each service stream are at the bottom of this post.

    The first chart

    With the publication of the draft budget, we can compare the budget for the coming year to what we’re looking like spending in the current year.

    It’s not possible to provide a completely ‘like for like’ comparison. This is where that 2nd chart referred to above is particularly useful. We can see changes to and between funding streams. So, on that chart, there is an unassuming line ‘Grants, Legislative and Service Transfers’, that accounts for £29m of the increased budget costs.

    The explanation is that the government have moved away from many individual grants and rolled them up into being part of the main allocation. This means the cost needs to be brought into the budget

    This has particularly affected Adults and Wellbeing as it’s added £26m to the budget with the other £3m being attributed to ‘Council Wide’ provision. Given the main allocation which is referred to here as ‘business rate’ funding is only increasing by £23m, there’s a shortfall in the funding from government. That’s one aspect that’s made this a particularly difficult budget.

    Nevertheless, in terms of scrutinising the spending plans, it would seem fair to test some of the assumptions.

    Possible Questions for the Executive at Scrutiny

    • That Children’s Services budget looks ambitious. It’s normal that controlling the cost of children’s services that gives the council the most difficulty. What assurance can we have that a 3.77% can be constrained?
    • Legal and Governance seems to be getting quite a large increase of 10.18%. The bulk of this increase is just described as ‘other’. Can you provide more details?
    • Place is receiving a large increase of 11%. Are we expecting to see improvements to delivery? It’s primarily attributed to the Strategic Investment Programme. What will be the visible returns on this investment?
    • The Adult Services budget is seeing major changes with a move away from grants. We’re allocating that loss of grants (£26m) to the main budget. Given we’re not being compensated in business rates to the same level, would we not be justified in reducing the provision to a level commensurate with that now provided? What would be the effect?
      In any event how are we going to monitor this provision in the absence of grant funding for which monitoring would be standard.
    • I think we’ve also got to monitor head counts. We’ve invested quite a lot over the years in IT and efficiency. We don’t usually receive details of head counts, but I think the very fact we’re having to apply for support means we’ve got be transparent.

    Appendix
    Trafford’s service headings

    As a quick addendum, I just wanted to provide this brief description of service headings. Do we need quite so many? I’ll leave that for another day.

    Children’s Services

    includes a vast range of support services designed to help children and young people who need extra support.

    Adults and Wellbeing including Public Health

    a vast array of services many of which are statutory under the care act 2014

    Place

    The Place directorate provides all those services linked to buildings and the ‘place’ we live in. From bins to planning.

    Strategy and Resources

    Typically, things that Trafford operates as entities such as libraries and bereavement services.

    Finance and Systems

    IT and financial management activities

    Legal and Governance

    Registrars, Legal

    Council-wide

    Includes Asset Investment, Council Tax Support, Treasury management

  • Setting Trafford’s Budget Pt 4 (Draft Budget Publication)

    Setting Trafford’s Budget Pt 4 (Draft Budget Publication)

    10:05 pm 6th January 2026

    The budget is published and the link is below. The council itself is recognising that the budget outcome is not the one it wanted, that there is a gap between the cost of the services it needs to deliver and the income that the council can raise (and keep).

    I can’t add to the official line linked above. As I see it, the changeover to a new fairer funding model has left Trafford on the wrong side of a line. We’re flagging this up to the Government and seeking a financial accommodation from them.

    Trafford remains a council that collects more money than it is allowed to spend itself. That surplus is only going to get bigger with projects like Therme and the Manchester United district. The idea of bankruptcy is just ludicrous.

    Trafford Draft Budget 2026

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  • Setting Trafford’s Budget Pt 3 (Council Income)

    Setting Trafford’s Budget Pt 3 (Council Income)

    It makes sense to look at Trafford’s income on its own. Trafford’s income is largely a case of what you see is what you get, with just a few areas of choice, notably the Green Bin charge which goes into reserves.

    The Current Budget (25/26)

    The cost of Trafford’s current services being delivered for this year is £233m. This has come from:

    • Business Rates £81m
    • Council Tax £139m
    • Reserves £3m
    • Capitalisation Direction £10m

    It’s worth emphasising that there is absolutely no mention of Government funding. This conceals the enormous impact Government makes on the distribution of collected business rates.

    Trafford collects a lot more than £81m from business rates on its businesses. In 24/25 the amount was £152m. So where’s that >£70m gone?

    Trafford’s Council Tax Leaflet 25/26

    This leaflet was issued prior to a public health settlement that slightly boosted the budget. The figures at the top of this section are correct.

    The Local Government Finance Settlement for 26/27

    Despite the fact Trafford’s funding is entirely locally sourced, the Government (of all persuasions) is never going to allow Trafford free rein. In December each year the government issues the finance settlement.

    For 26/27 England’s average increase in spending will be 5.7%.

    Trafford’s increase will be 1.8%.

    This assumes Trafford will increase its council tax by the 4.99% limit.

    So, the starting point for Trafford’s budget setting is council tax going up by 4.99%, yet Trafford’s core spending will nudge up just 1.8%.

    Only 1.8%! Where’s my council tax going? Where’s the increase going?

    It’s a fair question to ask.

    I suspect that both capitalisation direction (borrowing) and use of reserves were contributing to the current year’s spending power. The trouble is that they were one-offs and we haven’t got them next year. And it has to be stated that they haven’t got us out of a hole and the reserves are finite.

    What about other councils?

    We’re not alone nationally, but within Greater Manchester it almost feels as though we are. Greater Manchester has always been mix of the relatively prosperous alongside some of the poorest. That missing chunk of business rates is retained within Greater Manchester to support less prosperous areas here. That used to be fair.

    My view is that the latest local government settlement is putting strain on the Greater Manchester consensus. Manchester Council is seeing a huge increase from this settlement, yet Trafford is a net contributor.

    Nonetheless, our council tax on domestic properties is still low in comparison to our neighbours. Does it need to go higher again?

    What next?

    The draft budget needs to be published by midnight tonight. There has to be an emphasis on the word ‘draft’. Income is only half the story. We need the draft budget to understand spending pressures or easements.

    Technically, the Local Government Finance Settlement is under consultation. I’m confident Trafford will have been making the strongest representation. There’s been some discussion in political journals that the calculation Government is making is favouring London by weighting the cost of housing. Instinctively, that feels like double counting since housing costs have to contribute to deprivation which is the major weighting within the settlement.

    However, for Government to make changes to the formula would change everyone’s settlement. They’re not going to change the formula.

    I think we do need to look at the Greater Manchester formula.

    With regard to last year’s exceptional permission to borrow, I don’t think we ought to accept a regurgitation of that permission to borrow yet more money if that turns out to be government’s solution. That way is one-way and it ends in tears.

    I want to understand business rate growth and that’s’ something I’m keen to see in the report. Trafford has benefited from growing its business rate base. That’s being reset by government but looking at the Old Trafford area, there is still potential to grow it still and that’s an aspect to give some optimism.

    Finally,

    The selfish reason for writing this that the writing is helping me understand the budget. I don’t want to rely on officers. I’ve had to go to core material. Hopefully, I’m able to share some of that knowledge and test it,

  • Setting Trafford’s Budget Pt 2

    Setting Trafford’s Budget Pt 2

    We’re waiting for the draft budget to be published which is scheduled as it stands for the 6th January 2026 as part of the reports for the Executive on 14th January 2026.

    I’d be surprised if the Government issued anything further in the meantime. Although, you’d anticipate a lot of one to one communication with Councils negatively affected by the settlement proposals. Trafford is certainly looking to discuss.

    Changes to funding formulas can throw up huge anomalies. The Minister is well aware that Trafford council, which covers part of my constituency, is one of those anomalies. Will she commit to work with my Trafford parliamentary colleagues, Trafford council and me to see if we can iron out some of those issues?

    Despite there being little to report, I do think the data published by the Government each year on council tax changes is worth a glance, particularly as Alison McGovern seemed to put some stall on average council tax.

    Live Tables on Council Tax

    The table below compares the rates paid in Trafford to the average in England* and to Stockport. The year 25/26 is the first time that Trafford has closed the gap by even the most marginal amount.

    *not totally sure I’m comparing like for like on the average table as both county councils and mayors are not universal. As Stockport is a GM council, there’s much more assurance in the comparison.

    Graph showing increase in Band D council tax from 1993 to 2026

    Trafford still has a low council tax regime. Over the decades this meant Trafford denying itself millions year on year. Some might argue that this is due to Trafford having a tight political competition for control, but if anything, the competition in Stockport has been even more fierce. So, it is what it is, but isn’t allowing sudden changes in income to be cushioned against.

    First Post on the Budget

  • Setting Trafford’s Budget Pt 1

    Setting Trafford’s Budget Pt 1

    It’s my intention that this post is the first in a series of pieces on setting Trafford’s 26/27 budget. One of the main motives for writing it is to get my own understanding of it up to speed. They say that the best form of learning is getting to a position where I can explain it. You’ll have gathered that I am not yet at that point.

    So, a starting gun was fired on Wednesday 17th December 2025 with the Government’s publication of a library of documents and a statement to the House of Commons from Alison McGovern, Minister of State (Housing, Communities and Local Government).

    Link to Parliament TV

    It takes just 90 seconds for the Minister to get to a key theme of this Labour Government’s approach to financing local government.

    By breaking the link between funding and deprivation, the Tories punished poorer councils. Year after year, they exacerbated inequality. As a result, too many places in this country feel forgotten and left to fend for themselves…

    …It is why, according to our analysis, whereas under the old system deprivation scores could account for only 25% of variation in per capita funding applications, under this settlement it is up to 75%, with other important factors such as coastline, miles of road or visitor numbers making up the rest.

    So, we know that poorer councils will do better from this settlement than others and Trafford is not one of the poorest. As a Labour man, I totally support the intent. We will need to see whether Trafford is getting sufficient funding. That’s a process that will take us right through to setting the budget in March.

    Resources

    I’ll add to these as we proceed with budget setting but there’s already vital material online.

    Government Publications (Ministry of Housing, Community and Local Government – MHCLG)

    Local Government Association Material

    • LGA briefing A good summary and they’ll add more as we progress.

    Institute for Financial Studies they’re putting some good analysis and comment out there throughout this process.

    Featured Photo by RDNE Stock project: https://www.pexels.com/photo/marketing-exit-desk-notebook-7414218/

  • Fearing the worst, hoping for the best.

    Fearing the worst, hoping for the best.

    Trafford awaits its provisional financial settlement

    Might even be today, but more likely tomorrow or Thursday.

    This is the week where councils learn the amount that central government is going to top up their funding.

    We know the general rules that are going to apply. We know that the Government wants to support councils with high levels of deprivation.

    Last year Trafford had to apply for exceptional financial support which allowed the council to increase council tax beyond the normal capping of 4.99% and it provided the ability to borrow up to £9.6m to support the council’s in year budget.

    The council are currently anticipating a modest underspend of about £0.5m on this year’s budget. That would allow either reducing that £9.6m capitalisation for the year; or a small boost to the reserves.

    If it’s feasible, I’d prefer supplementing the reserves. In my view, they’re far too low.

    A favourable settlement from government will help narrow the funding gap. If it’s unfavourable, it presents some difficult choices.

    The Institute for Financial Studies (IFS) put out some analysis of the government’s budget approach for local government last month and it’s hard to see Trafford being one of the winners. Most of the policy shifts seem to work against Trafford, so it’s definitely a worrying wait but we’ll see.

    Image used under creative commons

    NEXT Conference from Berlin, Deutschland, CC BY 2.0 https://creativecommons.org/licenses/by/2.0, via Wikimedia Commons