Sheffield Council faces a £16m deficit dealing with coronavirus

Some of the UK’s largest councils say they will effectively have to declare themselves bankrupt unless the government provides more cash, an investigation says.
Watch more of our videos on Shots! 
and live on Freeview channel 276
Visit Shots! now

Nearly nine out of 10 local authorities face budget deficits as a result of the coronavirus, with the estimated shortfall forecasted to be as high as £3.7 billion .

Councils face increased costs from supporting vulnerable people, while their income from fees and rates is falling.

Hide Ad
Hide Ad

Grant funding of £34.37 million has been allocated to Sheffield Council to date, to cater for its 584,853 residents – h owever, this gives an estimated shortfall of £27 per person, or £16 m in total.

Council faces deficitCouncil faces deficit
Council faces deficit
Read More
How schools in Sheffield, Doncaster and Barnsley have responded after new Covid-...

Leaders previously said funding already allocated was " not even close’ to covering costs or money that had already been spent.

At least six councils say it is possible they will have to issue an S114 notice if further government support is not forthcoming, effectively declaring themselves bankrupt.

Of 173 councils which responded, 148, or 86 per cent, predicted a budget shortfall, and in Sheffield the council is expecting to meet its defict using its reserves.

Hide Ad
Hide Ad

In Yorkshire as whole, all 13 of the councils who responded predicted a shortfall of between £282.7m and £364.2m.

A Sheffield Council spokesman said: “There was already a well acknowledged problem with shortage of funding for local councils, even before the crisis, particularly for social care costs.

“Everyone knows local councils had their funding cut earlier and harder than any other part of the public sector.

“We will not ‘go bankrupt’ this year, but in two years’ time we will run out of reserves we can prudently use unless the government addresses the impact not just of the crisis.

Hide Ad
Hide Ad

“ We have received other grants, but these have been to pass on to other people rather to use to cover our costs e.g. we have now paid out more than £80m to businesses affected.

“ The current crisis has proved the importance of local councils being properly funded to provide support to the city, not just in times of crisis, but in the future.”

A message from the Editor:

Thank you for reading this story on our website. While I have your attention, I also have an important request to make of you.

With the coronavirus lockdown having a major impact on many of our advertisers - and consequently the revenue we receive - we are more reliant than ever on you taking out a digital subscription.

Subscribe to The Star website and enjoy unlimited access to local news and information online and on our app. With a digital subscription, you can read more than 5 articles, see fewer ads, enjoy faster load times, and get access to exclusive newsletters and content.

Visit https://www.thestar.co.uk/subscriptions now to sign up.Our journalism costs money and we rely on advertising, print and digital revenues to help to support them. By supporting us, we are able to support you in providing trusted, fact-checked content for this website.

Comment Guidelines

National World encourages reader discussion on our stories. User feedback, insights and back-and-forth exchanges add a rich layer of context to reporting. Please review our Community Guidelines before commenting.