“Gone down… in both cases. Not problematic is it?”

Indeed. So you now accept that Table 3 is accurate and that Manchester’s total government support has indeed dropped between 2009-10 and 2010-11? Just as Wandsworth’s has?

Say my headline salary is £20,000, and during that year I spend £500 on my employer’s products, and the following year my headline salary is £19,500, I still spend £500 on my employer’s products but my employer gives me £400 in vouchers to spend on those products, has my income (a) gone down, (b) gone up or (c) stayed the same, in absolute terms?

If a local authority one year receives £100m grant centrally, with another £25m in grants paid directly to individual core council activities within different directorates; and the next year receives £120m centrally, but nothing in grants paid directly to individual core council activities within different directorates; has its government support (a) gone down (b) gone up or (c) stayed the same, in absolute terms?

Gone down… in both cases. Not problematic is it?

The 2010-11 figure in Table 1 is drawn directly from the MTFP. The MTFP was written in 2009-10. You were saying?

From the Report to council dated 3 March 2010

The report to Executive noted a figure of total resources available of £548.914m in 2010/11 based on a nil increase in the City’s Council Tax and the utilisation of £1.853m from the parking reserve, £5.54m of dividends receivable from the Airport and joint ventures and £120,000 from
the Planning Delivery Grant reserve. The total included £342.438m government support through the Revenue Support Grant (including Manchester’s share of the NNDR pool) and £58.749m of Area Based Grant.

2.2 Total proposed spend against these resources was £550.129m which left a required contribution from the General Fund Reserve of £1.215m which would be used towards meeting one off costs of £1.757m within the budget for
2010/11.

i.e. the final TAR for 2010/11…. as I said.

More importantly; I use the word “assumption” in an accounting sense. *All* accounting figures incorporate assumptions.

Hokum.

“The reason that I chose the two particular figures, one from Table 1 and the other from Table 4 is because they are the ONLY figures that are NOT based on assumptions. They are REAL figures. As Lawman rightly remarks they are the equivalent of OUTTURN figures.”

The 2010-11 figure in Table 1 is drawn directly from the MTFP. The MTFP was written in 2009-10. You were saying?

More importantly; I use the word “assumption” in an accounting sense. *All* accounting figures incorporate assumptions.

The point about the difference between Table 1 and Tables 3 and 4 is that between the dates the tables were produced the Government changed the way it was paying grants. The Table 3 2010-11 figures calculate the grant in the new way expressly so it can be comparable to the subsequent year’s figures.

This:

“Why did I not use the 2010/11 figure in Table 4[I think you mean Table 3]? Simple, this was not a TRUE figure but an illustrative figure showing what the 2010/11 figure would have looked like if all the many changes to grants and allocations made in recent months had applied in the previous financial year.”

is wrong. It is not an illustrative figure; it is a different accounting treatment of the same underlying figures. It is not changes to grant figures, but changes to the way grants are paid, that are brought into account.

Try a different tack: Say my headline salary is £20,000, and during that year I spend £500 on my employer’s products, and the following year my headline salary is £19,500, I still spend £500 on my employer’s products but my employer gives me £400 in vouchers to spend on those products, has my income (a) gone down, (b) gone up or (c) stayed the same, in absolute terms?

If a local authority one year receives £100m grant centrally, with another £25m in grants paid directly to individual core council activities within different directorates; and the next year receives £120m centrally, but nothing in grants paid directly to individual core council activities within different directorates; has its government support (a) gone down (b) gone up or (c) stayed the same, in absolute terms?

I am beginning to think that you are being obtuse. You insist on comparing figures that are quite simply not comparable, and refuse to use figures adjusted expressly so that they can be compared. Oddly, the figures you insist on using support your argument, but the others don’t.

I don’t know if you are being willfully obtuse, but I’m going to give it one more go.

you choose to compare figures drawn from two different tables prepared on different assumptions

The reason that I chose the two particular figures, one from Table 1 and the other from Table 4 is because they are the ONLY figures that are NOT based on assumptions. They are REAL figures. As Lawman rightly remarks they are the equivalent of OUTTURN figures.

Specifically: the TAR in Table 1 for the year 2010/2011 was arrived at early in 2010 when the Council got its settlement for that year. It was then able to add in its revenue from other sources (dividends, council tax etc) and arrive at a total resource figure for that year. It was not an estimate, a projection but a TRUE figure.

The TAR from table 4 for 2011/12 was chosen for the same reason. Unlike all its predecessors in the document, this figure was the outturn figure produced in Feb 2011 when Pickles announced the settlement. Again, it is not a projection or estimate but a TRUE outturn.

I have therefore compared true outturn with true outturn.

Why did I not use the 2010/11 figure in Table 4? Simple, this was not a TRUE figure but an illustrative figure showing what the 2010/11 figure would have looked like if all the many changes to grants and allocations made in recent months had applied in the previous financial year.

In short, not a REAL number at all. Indeed, it could not have been calculated before Feb 2011 (when the settlement was made and all changes announced), even though it applies to the previous financial year!

What has happened since last June is that there have been many changes in the way councils are funded, with some grants being abolished, others rolled into formula grant etc. and other new grants coming on stream.

These changes make comparison difficult. One cannot, for instance, meaningfully compare Formula grant for 2010 with Formula grant for 2011 if the very definition of Formula grant has changed in the interim.

Therefore, the ONLY meaningful comparison that can be made is between outturn TOTAL resources. This is a measure of how much the council REALLY had to spend – i.e. the sum of all funding streams whatever they may be – in 2010/11 and how much it had to spend – again from all sources – in 2011/12.

These figures, I stress again, are not based on “assumptions” and are not calculated on different bases. The basis of their calculation is simple addition: Government grants (however constituted) + council tax income + dividends + reserves + any other revenue.

To clarify – Table 3 sets out the governmental contribution to TAR on a comparable basis, includign 2010-11. The figures in table 4 for Governmental contribution match those in Table 3 barring £3-4m. The difference is pretty close to the same in each year (a little short of £4m), but I haven’t identified what it represents.

The non-Governmental contribution to TAR is obviously pretty consistent year to year; it is Council Tax, plus dividends, plus contributions from reserves. Council Tax doesn’t vary significantly year to year if you don’t increase it, since they’re not making any new land; and contributions from reserves are a balancing figure. The reserves themselves aren’t going to be increasing when you’re drawing them down. Dividends equally aren’t going to be varying wildly – prudent investments don’t, by their nature.

The £109m figure is the figure for savings to be made in 2011-12 (see Table 4 and paragraph 18). That is up from £60m budgeted in the MTFP to be cut (see Table 1). Note though that the Business Plan objectives in the MTFP don’t reflect any “wild” increases in spending – the increases are less than inflation.

The MTFP itself shows a budgeted surplus for 2010-11; the deficits for the subsequent years, to be filled by savings, are created by (i) assumed reductions in resources (the largest proportion) (ii) increases in levies (above inflation) (ii) increases in contingencies (above inflation), and very little by (iv) increased spending (well below RPI inflation). (i)-(iii) are outside the Council’s control. This is of course all reflected in both Table 1 and Table 4, looking at the tables individually. There has been no spending spree.

This:

“Your “calls on resources” figures are what I said they were: wild, unfeasible wish-list figures that are much higher than Manchester has ever had to spend before”

is untenable on the basis of the actual figures.

“The specific relevance of looking at the outturn “total resources” figures is that this figure gives a true account of what Manchester has to spend in any given year.”

Indeed; but these show a reduction (see table 3), unless you choose to compare figures drawn from two different tables prepared on different asumptions. It was the relevance of those figures, as distinct from the Table 3 figures, that I was questioning.

I am not an apologist for Manchester CC; I would though like any criticism made to be solid and well-founded, and yours (and the OP’s) so far seems not to be. There is a table which shows comparably-calculated figures which shows a significant reduction, albeit not of £109m; you have however chosen to ignore that table and to base your claim on comparing incomparable figures. Why?

it is for Flowerpower to explain what relevance they have.

I have already explained their relevance.

To restate: Labour and various anti-cuts campaigners like to pretend that Manchester is being forced to cut its spending by £109 million.

The implication is that either the government has reduced the funding it gives to Manchester by £109 million and that last year Manchester spent £109 million more on services than it will this year.

Neither of those implications has any basis in reality.

As you yourself seem to recognize, the government has NOT reduced the grants it provides to Manchester by anything like £109 million.

The specific relevance of looking at the outturn “total resources” figures is that this figure gives a true account of what Manchester has to spend in any given year.

Your “calls on resources” figures are what I said they were: wild, unfeasible wish-list figures that are much higher than Manchester has ever had to spend before and therefore completely out of the question in a time of cutbacks and austerity.

Why then does Manchester publish a fantasy budget of this sort that is so totally out of keeping with both past experience and reasonable expectation for the future?

The only answer I can imagine is so that it can say “hey we are cutting £109 million” from “planned expenditure”. Fact is, they should never have planned to spend that much in the first place.

“Also, what you say about the call on resources shooting upwards does rather confirm Flower’s point about the cuts figure really representing a shortfall between money in the bank and some pretty wild and arbitrary wish last rather than cuts in previous expenditure.”

Nope; Table 3 includes both the 2010-11 outturn TAR and the 2011-12 projected TAR (on the basis of the published Government figures); and these show a reduction of £64m. Para 15 makes quite clear that the MTFS figures (Table 1) do not include grants (and expenditure) already in the directorate budgets.

To clarify that; there are grants tied directly to directorate level spending. In the MTFS, neither those grants nor the related expenditure are included. The directorates’ cash-limited budgets in the MTFS cover what isn’t paid for out of those grants. Table 4 seems to include all of those grants, and the related expenditure, so both figures go up, with no net change in the shortfall.

The fact that the calls on resources *for the same year* go up between Table 1 and Table 4 doesn’t show that one set includes a wild and arbitrary wish list, but that the figures are compiled on a different basis. Bear in mind that Table 4 was the one that was compiled after the Settlement, and contains the higher figures.

Since the figures are expressly not comparable, it is for Flowerpower to explain what relevance they have.

No, Flowerpower is right. The figures he uses aren’t based on assumptions, they are the equivalent of outturn. The first represents the actual resources available in the last financial year, the second is the final version for the about to be current year – superseding all previous estimates.

The para 15 you quote is right to say that comparisons are difficult – with various old grants being rolled into formula and new ones created – but I suspect that is precisely why Flowerpower chose to use Total Resources as his preferred measure.

The size of government grant support, for instance, could be affected by a school becoming an academy and the council seeing a corresponding reduction in DSG. Also, what you say about the call on resources shooting upwards does rather confirm Flower’s point about the cuts figure really representing a shortfall between money in the bank and some pretty wild and arbitrary wish last rather than cuts in previous expenditure.

“The link you yourself provide contains the figures.

TAR for 2010/11 is in table 1. on p4. (£549,571,000)
TAR for 2011/12 is in table 4. on page 9. (£581,456,000)”

This was your mistake; using figures from two different tables incorporating different assumptions and numbers.

Read para 15:

“Direct comparisons of the Council’s resource capacity after the final settlement
with previous analysis is not easy as many previously received specific grants,
that would have been included within individual cash limits, have been rolled
into the general grant settlement, rolled into other grants (eg Early Intervention
Grant) or ceased altogether. There remains some uncertainty over a number
of smaller grants where detailed announcements are awaited. The officers’
assessment of the overall resource position shows an overall and future
worsening of the resources available of almost £60m over the next two years,
compared with the assessment which was undertaken immediately following
the CSR.”

and Table 3 at para 16 which shows a reduction in TAR of c£64m from c£490m to c£426m.

What should have given you a clue is that the calls on resources in Table 4 are stated significantly higher than those stated in Table 1 (by £86m for 2011/12). I would surmise that the Table 4 calculation includes both the expenditure within the departmental cash limits which had been directly grant-aided and the offsetting grant associated with those expenditures, having the effect of increasing both numbers from the 2010/11 baseline.

Where on the Manchester CC website did you get those figures?

The link you yourself provide contains the figures.

TAR for 2010/11 is in table 1. on p4. (£549,571,000)
TAR for 2011/12 is in table 4. on page 9. (£581,456,000)

The figures in the report to Council on 16 Feb 2011 suggests that your figures are wrong

Nope. They’re correct. The mistake you have made is to look only at Table 1. where the 2010/11 figure is the correct one but the 2011/12 figure is a guesstimate from the Medium Term Plan. Table 4 on p 9 updates this figure in the light of the actual Financial Settlement and is, therefore, the correct one.

“Maybe I’ve missed something, but did you write this analysis without including any figures as to how much each local authority is having cut from its budget?”

I’ve included a percentage cuts figure if that’s what you mean (that figure relates to the cut from central government) but I don’t have an actual figure for each one, just the percentage.

Where on the Manchester CC website did you get those figures? The figures in the report to Council on 16 Feb 2011 suggests that your figures are wrong:

http://www.manchester.gov.uk/egov_downloads/LocalGovernmentSettlement2011-13.pdf (see page 4)

It is true that the reserves are not in that calculation – but since each year they are drawn upon, they can’t provide the increase in resources which your figures show.

although they make well metaphorically be facing ‘bugger’ as well I suppose

I smell a rat. Considering Sheffield is less reliant on the government grant and more on council tax it would definitely make sense that Manchester is facing bugger. But you don’t include the figures or even allude to them.