Sheffield Council chiefs claim authority is in a better financial position than Leeds and other big cities

The council had a balanced budget in March but then Covid-19 hit. The council’s costs for the pandemic for 2020/21 are currently estimated at £82m - but further costs are still emerging, and a second wave could significantly increase these.

Sheffield's financial challenge in the short term is less severe than Leeds, Nottingham and Manchester though.

David Phillips, head of strategic finance, says in a report: "A number of other local authorities are indicating that they are under more immediate financial pressure than we are, with their usable reserves likely to be exhausted sooner and/or they are more exposed to significant losses on their commercial projects.

"Manchester Council has benefited from being a major shareholder in Manchester Airport, and anticipates a significant fall in income as air travel has greatly reduced.

"Nottingham Council is concerned about the impact of the crisis on income from their associated green energy venture RobinHoodEnergy (RHE).

"This was already under considerable financial pressure, with cumulative losses of £34m by March 2019, and has just been the subject of a Public Interest Report from Nottingham’s external auditors which criticised the council for allowing other services to suffer in its efforts to support RHE.

"Leeds Council appears the worst affected Core City, with public statements that they forecast the costs of the pandemic, even after government funding, will exhaust their available reserves during 2020/21."

Sheffield is not about to go bust and has savings it can dip into but Mr Phillips warns the council can't yet fully determine the longer-term impacts of reduced revenues and increased costs.

"No clarity on longer-term government funding can be expected until late in 2020. If insufficient support for our continuing Covid-19 costs emerges, then the council’s financial position will become very challenging.

"If sufficient government support is forthcoming, we will be able to play a full part in the recovery of the city and direct funds to the places which will most benefit citizens and regrow the local economy, jobs and prosperity."

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