Belt-tightening finally balances council books

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A PREDICTED £7million cash black hole at Sheffield Council has now been overcome – with officials saving so much money they expect to have a surplus.

Last summer, the ruling Labour group feared extra cuts of up to £7m would be needed to balance the books, in addition to £84m of savings already approved for the 2011/12 financial year.

But now careful money management has led to a predicted surplus at the end of March of £1,392,000.

Officials say the biggest underspends were in corporate budgets, communities and resources, although the Place department, which covers development, environment and leisure services, is forecast to overspend by £2.3m.

Allan Rainford, of Sheffield Council’s finance department, said: “The latest report suggests that the problems associated with achieving a balanced budget have been resolved.”

Savings have come from securing extra grants for Children’s and Young People’s Services, changes to procurement contracts and understaffing.

But the Place department has continued to overspend due to reduced income from parking and planning fees and lack of success in achieving savings from the bin contract with Veolia.

Surplus money not spent by the end of March will be used to offset a further £50m of cuts next year.

Details of the council’s financial position are in a report to the ruling cabinet on Wednesday.

The same meeting is also set to approve a plan for Sheffield Civic Trust to set up a new subsidiary organisation to run Sheffield International Venues, to take advantage of sports services’ exemption from VAT.

The trust’s current accounting set-up prevents it being excluded from the tax.

Meanwhile, the cabinet is also set to order officials to study how a £2m Government grant which has spent the last six months in a bank account could be spent bringing empty homes in Sheffield back into use.