Budget: Sheffield Council to increase tax by 4.99 per cent

For most homes, this will mean an increase of £1.12 per week.

To help the most vulnerable, £200,000 was added to the council tax hardship fund.

“This is a difficult choice and will place an additional financial burden on the households of Sheffield,” officers said in a recent report but added the decision was not taken lightly.

They said the alternative was finding an extra £5 million in savings which would have had too great an impact on vital services.

It comes as the authority was left on a cliff edge after fighting to keep up with inflation, rising demand for services and having to make more than £475 million in savings over the past 13 years to offset cuts to funding.

Officers said government funding was nearly cut in half in real terms since 2010 – forcing the authority to rely more on local taxation.

It made balancing the budget a nearly impossible task without wholesale closures of vital services, according to council reports.

Talking about the budget near the end of last year, councillor Bryan Lodge, co-chair of the finance committee, said: “It is almost like a Doomsday scenario. We’ve taken anything and everything over the past 10 years – where else do you go?”

In an effort to stay afloat for 2023/24, the council is making savings by redesigning services, changing care packages and making cuts to council buildings and post-Covid-19 leisure subsidies, to name a few.

Officers warned that if planned savings were not delivered, the council would become “financially unsound” from 2024/25 – meaning ‘bankrupt’.

When a council fails to balance its budget – as seen in Kent, Hampshire, Slough and others – the government can bring in commissioners to run the authority.

Coun Lodge said that would mean cuts made with little regard for the consequences.

For now, the council has been able to close its budget gap for the coming financial year thanks to a better than expected settlement from government.

Councillors on the strategy and resources committee are due to discuss the latest report on the budget in an extraordinary meeting on Tuesday, February 21.