Sheffield Council faces £61.2m budget gap

The city council’s strategy and resources, a key committee made up of policy committee chairs and chaired by council leader Coun Tom Hunt, will next week (Thursday, September 7) look at budget plans. These are based on suggested council tax increases of 2.99% for 2024/25 and 2% each year after, plus adult social care precept (charge) increases of 2% added on top for 2024/25 and 1% each year after that until 2027/28.

Council tax helps the local authority to fund around £1.5 billion a year that it needs to provide a range of services for the 582,000 citizens of Sheffield.

A statement from the council said: “Over the past 13 years, Sheffield, along with many other local authorities, has seen significant reductions in funding from central government. Alongside this, demand for services is rising.

“As a council we are taking a proactive cross-party approach to ensure we manage this challenge in the best way possible for the people of Sheffield.”

The statement said that in March the council agreed on a balanced budget for 2023/24 which required £47m of savings to be made and did not use council reserves to balance the books.

It added: “The council is now considering next year’s budget and an updated set of financial predictions for the medium term, covering the period 2024-2028.

Budget gap

“Over the coming four-year period the council has a forecast budget gap of £61.2m of which £18.1m is in 2024/25. The funding from government for council services has reduced since 2010 which means the council now receives 29% or £856 per resident less in real terms.”

Three key areas of concern outlined in the report to the committee include increasing demand for adult social care services following the pandemic, rising costs of placements for children who are living in the local authority’s care and home to school transport costs for children.

The third area is homelessness and an issue over the government not fully reimbursing councils for all housing benefit payments they make, having set the levels of payments they must make.

Next week’s meeting will also review the council’s performance on how it has met its current savings targets. The forecast overspend of £17.6m for 2023/24 is described as “not unusual at this stage in the year”. Work will continue to try to reduce that figure.

A report to the committee says that only £13m would be left in the council’s reserves if they were used to cover the £17.6m overspend.

Fiance committee chair Coun Zahira Naz said: “We and other councils have had our budgets hammered by cuts from central government over the last 13 years. In Sheffield we’ve been vocal about that and will continue calling on the Government to step up and provide fairer funding.

“Demand is rising as funding plunges – there are no easy decisions left to take.

“Despite this, we know we must act for the people of Sheffield. Yes, we have to make significant savings, but we’re also looking at our approach to budget planning over the next three to four years to get us on a steady and consistent footing.

“Let there be no doubt – this position is tough. But by tackling these issues early, transparently, and proactively and cross-party, we’re doing all we can to protect the services we know the people of Sheffield rely on.”

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She said this includes support with the cost-of-living crisis.

“There is a mammoth task ahead of us and every year it gets harder. But – whether it’s supporting our young people, tackling homelessness, hosting major events, or unveiling major regeneration in the city – we will continue to deliver for this incredible city,” said Coun Naz.

Chairs of all committees will be working on how to save costs in their areas and presenting these to their members, before the budget proposals go out for public consultation this autumn.

The budget for 2024-5 will be discussed at a full council meeting at the end of the financial year.