'Crisis management' or 'prudent' spending? Debt for fixing Sheffield's roads will now take 40 years to repay

Road resurfacing began in 2012 under Sheffield Council's 2.2bn Streets Ahead contract with Amey
Road resurfacing began in 2012 under Sheffield Council's 2.2bn Streets Ahead contract with Amey
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Taxpayers in Sheffield will now be saddled with the cost of fixing the city's roads until 2052 - 15 years later than originally planned.

Sheffield Council says extending the period over which it repays the debt from 25 to 40 years will free up essential funding in the short-term to bridge a shortfall in social care funding.

But Green Party councillors have criticised the move, arguing that the council should settle its debts sooner so future generations are not burdened with the cost.

The council entered into a £2.2 billion 25-year Streets Ahead contract with Amey in 2012 to fix the city's roads and pavements before maintaining them over the length of the contract.

It must repay its debt to Amey within 25 years, but the £135 million it borrowed independently to finance the work will now be paid back over 40 years rather than the 25 originally planned.

That will free up around £6m extra per year between now and 2024 but will mean the council pays more from 2037 until the debt is cleared in 2052.

The decision to reduce the sum set aside each year to repay this and other debts - including the bill for the 1991 World Student Games, which is finally due to be settled in 2024 - was taken under delegated powers earlier this month.

But Councillor Rob Murphy and his Green Party colleagues called in the decision, which went before members of the council's overview and scrutiny management committee today.

Eugene Walker, the council's executive director of resources, told the committee he believed this remained a 'prudent' approach and claimed the council was paying off investment in its assets quicker than many other local authorities, which were spreading their repayments over up to 60 years.

"This is supporting £6m of investment in social care next year. If we don't do this, we will have to find £6m from somewhere else in the budget, which is getting harder and harder," he said.

The council says the total cost of repayments will not be affected.

The committee voted to take no action, other than to request the decision is considered by the council's audit committee.

Speaking after the meeting, Coun Murphy said: "The council's in this mess because it borrowed too much. This is crisis management rather than treasury management."