Sheffield facing £90m funding gap as grant is axed

Sheffield City Council says it has suffered �352m cuts in the last seven years. Picture: Andrew Roe
Sheffield City Council says it has suffered �352m cuts in the last seven years. Picture: Andrew Roe

Sheffield faces a £90m funding gap when a major government grant is axed.

The Revenue Support Grant, worth £90.6m last year, is being slashed to zero in 2020.

It comes on top of £352m of funding cuts over the last seven years, according to Sheffield City Council.

But plans to offset the loss by allowing the authority to keep all of its business rates - worth an extra £100m-a-year - appear to have stalled.

The alarm was sounded by the Local Government Association. It said the Local Government Finance Bill, which was passing through parliament before the election, was not reintroduced in the Queen’s Speech.

Lord Porter, LGA chairman, said securing the financial sustainability of councils must be top priority for the new government.

He added: “The money to provide vital day-to-day local services is running out fast. There is also now huge uncertainty about how local services are going to be funded beyond 2020.

“Councils can no longer be expected to run our vital local services on a shoestring.”

A Sheffield City Council spokeswoman said its core funding was £90.6m last year.

Business pays £216m-a-year in rates, with half going to government. Plans to allow 100 per cent retention would hand it an extra £100m.

A Department for Communities and Local Government spokesman said: “The government is committed to delivering the manifesto pledge to help local authorities control more of the money they raise and will work closely with local government.”