Council tax goes up in Sheffield thanks to a £14m budget blackhole

Social care costs have rocketed while the pandemic has significantly reduced income coming in, such as council tax, business rates and car parking.

The council says returning services to pre-pandemic levels has proved “extremely challenging”.

Finance chiefs initially thought the council was facing £82m in additional costs for 2022/23 and previously warned the budget was “spiralling out of control”.

They have now managed to identify £53m of additional income, reduced costs and found ways to control spending.

In addition, a voluntary redundancy scheme aims to reduce the council’s workforce by more than 160 people.

The bleak budget report comes as chief executive Kate Josephs remains on paid leave from her £190,000 role after admitting she attended a drinks party during pandemic restrictions.

She was director general of the Government’s Covid Taskforce at the time and the party is now subject to a Metropolitan Police investigation.

Dipping into savings

There is still a £14.5m budget gap which will need to be filled with financial reserves – the council’s savings.

It’s only the second time since 2010 that reserves have been used to balance the budget and it’s a short term solution.

The report says: “It is imperative that robust action is required to deliver planned savings and contain financial pressures over the next year.

“This action includes reviews of key areas of operations such as early intervention, hardship support and libraries. If this action is not taken successfully, the council’s position will become financially unsound from 2023/24 onwards.”

Council tax will rise

This year’s Government Spending Review allows a council tax increase by up to 1.99 per cent with an additional 1 per cent precept to help cover adult social care costs.

This will see a total increase of 2.99 per cent which should raise an extra £7m.

The council will add an extra £200,000 to the hardship fund to continue supporting residents who are struggling financially.

If you live in an area covered by a parish council, you also pay a precept to fund those. Bradfield and Stocksbridge parish councils are not increasing their precept but Ecclesfield is raising its by three per cent.

Austerity is still biting

There will be no specific additional funding given to Sheffield to tackle the ongoing impact of Covid in the city.

Instead, local authorities can expect a share of £1.6billion general extra funding for councils for 2022/23.

Sheffield should receive £19m but says it’s not enough to close the budget gap and does not compensate for ten years of austerity and reduced funding.

The council says a decade of sustained funding cuts resulted in a 29 per cent reduction in core spending power in Sheffield – working out as a £828 reduction per home.

Uncertainty over future funding from the government also means it’s difficult to plan for the future.

The Budget will be presented at a scrutiny meeting on February 10 before going before the Executive on February 16.