Sheffield Council tax may rise due to cuts in budget

Sheffield Town hall
Sheffield Town hall
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Council tax may go up for the first time since 2010 as Sheffield Council plans a radical rethink of how services are delivered to cope with continued spending cuts.

The authority is preparing to implement massive savings for a third year running - this time to the tune of £50 million from its current £465m annual budget.

Trade union officials are today meeting Sheffield Council bosses to discuss the impact on staff, with hundreds of jobs set to go and other workers facing a continued pay freeze.

The level of cuts planned at Sheffield Council is £10 million higher than originally forecast, because the economic recovery has failed to materialise.

Across South Yorkshire, overall cuts to council budgets in Sheffield, Rotherham and Barnsley are expected to total £83.5m over the 2013/14 financial year - at least £20m more than originally planned.

The scale of further spending reductions came as Church Action on Poverty and Christian Aid parked their Tax Justice Bus in Sheffield city centre yesterday as part of a nationwide campaign against tax dodging by the wealthy.

The charities urged passers-by to get on board and add support to their campaign against poor people being hit ‘unfairly’ by austerity.

Coun Bryan Lodge, Sheffield Council cabinet member for finance, said: “We will have to do things differently due to the continued scale of the cuts.

“The way services are provided will have to change.

“We have also not decided whether to increase council tax next year. The Government has announced funding to cover a further freeze but this is only likely to be the equivalent of a one per cent rise when costs are increasing.

“For the current and last financial year, we have received a grant equivalent to a 2.5 per cent increase, equating to £4.9m each year.

“The money can only be temporary so will just postpone even more spending cuts.”

However, he said any rise would be constrained because the Government has passed a law meaning councils setting a council tax increase above two per cent must gain approval through a referendum.

The last council tax increase, of 1.5 per cent, was made under the Liberal Democrats in 2010.

Coun Lodge said Sheffield Council has no choice but to implement the spending cuts - otherwise councillors would lose control of budget setting, which would be taken over by Town Hall officers or, in a worst-case scenario, the Government.

Jon Mordecai, chairman of trade union Unison at Sheffield Council, said: “There is a meeting today between trade unions and senior management at the council about some of the options for the future.

“We have already had three years with a pay and increments freeze and they have cut more than 1,000 jobs.

“Even if staff put forward some sort of extra voluntary savings, the amount which could be saved would not be enough to stop substantial cuts to services.”

Mr Mordecai said the situation was ‘worse than the 1970s or 1980s’ - and was causing ‘depression’ among the council’s remaining workforce of 7,400 non-school staff.

He predicted savings would come from axing liaison staff between the council and organisations such as the police and health services, and bringing in the extensive use of volunteers to run facilities such as libraries.

Public consultation has just closed on the future of Sheffield’s library service, which costs £6m a year, results of which have not yet been revealed.

No action has yet been announced by trade union officials in Sheffield in response to the fresh cuts - although around 200 members are travelling to London to join a national demonstration against austerity on Saturday, October 20.

The higher-than-expected cuts have been criticised by leaders of all three Labour-run councils in South Yorkshire.

Sheffield is having to save £10m more than the £40m originally forecast, and Rotherham an additional £8m - bringing its cuts to £17m.

Barnsley Council is making £16.5m of savings, which is several million pounds higher than expected.

Rotherham Council has not revealed how many jobs will be lost due to its coming year’s cuts.

Barnsley Council announced 300 more jobs are under threat.

The authorities’ problems are compounded because they will not find out the precise level of their Government grant, one of their biggest sources of income, until several weeks after the Chancellor’s Autumn budget statement is announced.

The statement has been delayed until December - and councils have to complete their own budgets for 2013/14 by March.