Finance chiefs warn Sheffield Council will run out of savings because of massive Covid-19 impact

Finance chiefs have warned Sheffield Council will run out of savings within two years because of the "massive and unplanned" impact of Covid-19.
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So far, the council is estimating a £77m impact, of which £50m will hit this year. And it warns this won't be a one-off, but will be an ongoing problem.

Director of resources Eugene Walker said: "We have lost income from parking fees and planning charges, from providing home care services for free and a long history of having to make savings to cope with government grant cuts.

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"We had £16m of savings to deliver this year and we won't be able to make those because so much focus has been on coping with this crisis rather than delivering those savings.

Sheffield Town HallSheffield Town Hall
Sheffield Town Hall

"We will have to draw on our reserves but the problem with that is we are already drawing on £35m over the next three years so this will put a further strain on.

"We will not go bankrupt this year but in two years we will run out of reserves, which are like household savings, you can use them up if your income drops but eventually they will run out and that's the position we are in as a council. Councils across the country are in this position."

Mr Walker said the government would need to come up with a long term funding plan to help councils.

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"We have had £34m of government grants, which is most welcome but insufficient.

"There's a well acknowledged problem with the shortage of funding for councils, particularly with social care costs and this has brought it even more to the fore during this crisis

"There will have to be some kind of long term sustained response from government about how to fund local councils and social care."

Mr Walker said the council and health bosses have also given £300,000 to food banks to make sure they have sufficient supplies over the next few months.