Sheffield Council predict £70m pressure due to the impact of Covid-19

The full financial impact of Covid-19 won't be known for some time, says Sheffield Council - but bosses at the authority are already predicting a £70 million pressure.

Monday, 18th May 2020, 9:38 am
Updated Tuesday, 19th May 2020, 4:28 pm

The council keeps a register which details the key financial risks it is facing and one significant addition is coronavirus.

Dave Phillips, council head of strategic finance, says in a report: “The virus and ongoing lockdown clearly present an unprecedented challenge to local authorities up and down the country.

“As well as having to engage in very different ways of working and overcome significant and varied problems, there is also a potentially huge financial impact.

Sign up to our daily newsletter

The i newsletter cut through the noise

David Phillips, head of finance, Sheffield Council

“The council anticipates about £70m of Covid-related pressures.

“These include reduced business rates and council tax income, reduced fee income from areas such as parking and leisure facilities and increased costs, particularly in relation to social care.

“To date, we have received £34.3m of funding from central government, to cover general costs across the council.

“This still leaves us significantly short of the funding required. We continue to make plans to mitigate this gap, and to lobby government for an appropriate level of funding."

Key services hit in March include leisure facilities losing £600,000, parking services seeing a drop of £200,000 and the legal and governance department’s income reducing by £112,000.

Mr Phillips said the impact of the coronavirus outbreak has yet to fully emerge, but has increased the need for ‘liquid funds’.

The council took additional borrowing before central government announced it would make funding available.

He said: “The full extent of the impact from Coronavirus will not be known for some time.

“However, the immediate risk to the financial markets, coupled with additional burdens on council spending and uncertainty over funding, have increased the need to carry larger cash balances.

“Consequently, the council borrowed £40m in March that would normally not have been taken until early in the following financial year or even later.

“This means there will be some interest incurred as a result of carrying these additional funds.

“Fortunately, the borrowing was taken at very low rates and was planned to be taken during 2020-21 anyway.”

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.