Maximum council tax rise gets green light amid warning hard times aren’t over in Sheffield

Members of the council have voted for the balanced budget for the 2024/25 municipal year at a full council meeting on Wednesday (March 7), but there was a warning the authority wasn’t out of the woods yet.

The council approved the revenue budget and the capital programme. The report on the proposals was previously discussed by the strategy and resources policy committee at the end of February.

The purpose of the revenue budget report was to recommend to the full council day-to-day spending for 2024-25, including the position on reserves and balances; to approve the council tax rise; and to note the levies and precepts council taxpayers must pay to other authorities like the fire service.

At the same time, the purpose of the capital strategy and budget book for 2024 to 2054 was to provide a snapshot of the city council’s capital programme until 2029, together with the background and context for its capital investment over this period and the next 30 years.

In 2024/25, the revenue budget will be set at £543.815million.

Council tax paid to the authority will increase by 4.99 per cent – the maximum allowed without a referendum. It will be made up of 2.99 per cent for general services and two per cent ringfenced for social care.

A council document recognised that this would place an additional financial burden on the households of Sheffield as most homes will see an increase of £1.17 per week.

Cllr Zahira Naz (Labour), the chair of the finance committee, told the members that the council there was still a “big challenge ahead of us” but Sheffield was not called “the Steel City for no reason”.

She said they were fighting for every penny.

The leader of the council, Cllr Tom Hunt (Labour) blamed a “decade of austerity” for having to make difficult decisions.

He said the central government “drastically cut” the council’s spending power.

“A decade of systematic under-investment,” he said.

He celebrated the council’s work to manage its budget “prudently and responsibly” despite the challenges they had to face – partly, as a result of the actions taken by the central government.

Cllr Shaffaq Mohammed (Liberal Democrats) said he agreed with one of his colleagues who said Chancellor Jeremy Hunt should’ve announced a general election for a “fresh start” as the Conservatives “clearly ran out of steam”.

He admitted that the council faced “huge” challenges – having to use the reserves to balance the budget – but also added he was “relieved” Sheffield was not in the situation that Birmingham City Council is. It has issued a section 114 notice, effectively declaring bankruptcy, as it was not able to set a balanced budget as legally required. To tackle problems, it wants to raise council tax by 21 per cent and make £300m of cuts over the next two years.

“What Birmingham had to do was really, really difficult and I don’t envy those councillors,” he said.

However, he added: “I’m not saying we’re out of the woods yet.”

Cllr Douglas Johnson (The Green Party) said the council came a long way from the “budget held in secrecy” and together councillors “get things done”.

When he criticised the Chancellor, he also added the challenges would still be there in the 2025/26 financial year so “don’t hold your breath if you’re expecting a general election to change things”.

In a series of proposed amendments, parties and groups introduced a number of ideas.

This included Labour proposing an increase in fines for fly-tipping and littering; the Liberal Democrats introducing a pilot for larger blue bins for the first 5,000 households and free bus passes for members of Sheffield Young Carers; the Greens urging the council to use the yet-to-be earmarked surplus revenue from the Sheffield Clean Air Zone to improve air quality further and the Sheffield Community Councillors investing into Red Routes.

After a roll call vote, the Labour amendment carried.

The budget was approved after 76 councillors voted for it with only one councillor voting against it and one councillor abstaining.