Council £5.8m cash shortfall

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SHEFFIELD Council is facing continuing difficulties with balancing its budget for the current year - with savings of almost £5.8 million still required.

And a report has also revealed Sheffield Council’s overall debts stand at more then £2.1 billion.

The black hole in funding for 2011-12, which has partially occurred due to problems negotiating savings with contractors including Veolia, has been reduced from around £7m in June.

But the balance still has to be made up by the end of March - before further cuts of £56m are required next year.

Ruling Labour councillors say they hope to make up the amount through ‘efficiency savings’ and not through cuts to services.

The council’s overall budget for 2011-12 is £492m but departments are forecast to overspend by £5.783m.

In a report to Wednesday’s cabinet meeting, officers have highlighted a £3.146m forecast overspend in children’s and young people’s services, due to additional staffing costs in social services, and an overspend on Sheffield Futures youth service.

Some £800,000 of savings to be made by Veolia, through changes such as introducing Saturday bin collections, have still not been agreed, while design and project management services are expected to overspend by £860,000 by ‘shortfall in income’ from lack of planning cases.

A host of smaller overspends of tens of thousands of pounds are set to occur in departments including City Centre Management, culture and environment, animal wardens, IT, transport and staff training.

The council said some extra pressures, such as increased social services costs, could not be helped due to statutory duties, but some others have been due to delays in making 270 staff redundant.

A report to the council’s audit committee has revealed the council’s overall debt was £2.16 billion, including £253m of short-term debt - which includes money borrowed to help the Sevenstone shopping development - and £1.91 billion of long-term liabilities, mainly relating to the World Student Games.

But the total has fallen from £2.281 billion at the end of March 2010.

Set against the debts are £3.87 billion of assets owned by the council, which include all of its buildings, vehicles and equipment.

Sheffield Council leader, Coun Julie Dore, said: “We hope not to have to make cuts to services and make up the savings through efficiencies but if this is not possible, the savings will have to be added to cuts needed next financial year, instead.”