Sheffield council hails slashing forecast budget gap by £60m - but only if big bet to save costs pay off
Five years ago, the Steel City was facing a £70m blackhole in the city council’s budget by 2030
A dramatic report claims Sheffield Council is now in the best financial position it has been in a decade - but only if big plans for savings in the next three years pay off.
In the last five years, forecasts said the Steel City was facing a £70m blackhole in its budget of over £70m by 2030.
This was reportedly driven by huge foreseeable costs in adult care of more than £36m, as well as spending on housing homeless people and transporting children with special educational needs (SEND) to school.
However, in a huge turnaround, the council has now announced it expects this gap to shrink dramatically - down from £70m to around £10m by 2030/31.
Philip Gregory, Director of Finance at Sheffield City Council, said: “These reports show that Sheffield is in a much stronger financial position than we have seen for a number of years.
“While we still face challenges and there is more work to do, the scale of the financial gap we need to close is significantly smaller than previous forecasts.”
A council report hails this as the “strongest medium-term financial outlook for many years.”
However, the report also cautions that will only happen if the council’s big bet to save money - a programme called Future Sheffield - pays off.
The report - called the council’s Medium-Term Financial Strategy - was discussed at the Strategy and Resources Committee on September 2.
Why does the council’s financial position suddenly look so much better?
On paper, Sheffield City Council suddenly looks much healthier, almost eliminating a forecasted budget shortfall of £70m.
The council has cut or reorganised areas that could have cost tens of millions like social care, can foresee better grant funding, and will use a large chunk of its reserve money.
A forecast for huge spikes in costs driven by demand for social care has fallen by £52.4m.
It expects £6m more in grant funding, while other savings include £5.6m from controversial moves like cutting costs associated with transporting SEND children to school in taxis.
But, this sudden turnaround relies heavily on a programme called Future Sheffield.
The council said: “[This strategy] assumes delivery of £66.6m of savings through Future Sheffield,” while the report calls it “the single most significant factor in the council’s future financial success.”
What is Future Sheffield?
Future Sheffield is a “whole-organisation transformation programme” to make a total of £66.6m in savings across the council.
This is sometimes by making cuts, sometimes by ‘spending money to save money’ and make areas more efficient in the future.
It is extremely broad, but a report outlining Future Sheffield points to several examples of how this is done.
| Area used for savings | What Future Sheffield wants |
| Adult social care | The council wants people to “remain independent for longer” to reduce costs on adult social care. Future Sheffield is funding programmes to teach adults with learning disabilities how to cook and use public transport, or encourage older people recently home from hospital to become independent again sooner rather than paying carers. |
| Temporary accommodation for homeless people | Future Sheffield wants to buy council-owned accommodation so as to reduce the number of homeless people being temporarily housed in B&Bs. The council also wants to prevent homelessness earlier. |
| ‘Automated note taking’ | Future Sheffield wants to buy ‘automated note-taking’ technology that will allow social-care staff to spend less time on admin tasks. |
| Online self-service for residents | Future Sheffield wants to move residents from contacting the council towards a self-service option and implement AI. The report says more than 300 processes have been reviewed and gives examples of reducing telephone demand for taxi licensing and housing rents. |
The announcement details many areas that show what has cost the council so much money.
A budget monitoring report expects an overspend of £8.35m in 2026/27.
And, council tax payers can expect a 4.99 per cent increase in their bills each year for the next three years.
Inflation pressures will reportedly cost £19.3m over three years, and ‘corporate expenditure’ has increased by £36.9m, from areas like investing in Future Sheffield as well as redressing staff over equal pay.
The council will also take big bites out of its reserves. Total reserves were about £321m three years ago, but are forecast to fall to £164m by 2027/28, before recovering to around £216m by 2030/31.