Voluntary redundancies sought as Covid strain leaves £60m shortfall in Sheffield City Council budget

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Sheffield City Council has revealed it faces a deficit of more than £60m in next year’s budget, as public consultations on its spending open.

Sheffield City Council has revealed a deficit of £62.3million in next year’s budget – even after making savings of more than £35m – and is blaming the strain of the pandemic on its services, as well as a lack of central Government funding, for the shortfall.

Top officials have confirmed that in order to balance the budget, ‘voluntary early retirement’ and ‘voluntary severance’ schemes are underway in a bid to cut costs.

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Councillors have slammed central Government for its continued cuts to local government funding, and called for financial aid to support the city.

Sheffield Town HallSheffield Town Hall
Sheffield Town Hall

This comes after The Star announced last week that council tax would rise, and that members of the public have been invited to have their say on how the budget should be spent at consultations that will last until January 17.

Councillor Cate McDonald, Executive Member for Finance and Resources, said: “Over the past decade we have faced cuts to our budget, and since 2010/11, Sheffield has had its spending power reduced by £215m (31 per cent) – the equivalent of £383 for every Sheffield resident. This is above average for the rest of England.

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“As a result, hard-working people continue to shoulder this shortfall of funding. The situation is not sustainable and we need the Government to provide the relevant funding to help Sheffield recover.

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Cllr Cate McDonald, Executive Member for Finance and ResourcesCllr Cate McDonald, Executive Member for Finance and Resources
Cllr Cate McDonald, Executive Member for Finance and Resources

“We are prioritising the vulnerable and remain ambitious for the city and the aims of our One Year Plan but acknowledge that some difficult choices will have to be made. We want local people to tell us what they think through the consultation and help us shape these decisions.”

Initially, for 2022/23 year, the council was facing a budget gap of £98 million before savings were made and actions were taken.

So far, the council has declared £35.7 million in savings, meaning there remains the net deficit of £62.3 million.

A statement from the council said: “Since the pandemic, there have been unprecedented demands on health and social care services which the council has not hesitated to provide but now faces the challenge of achieving a balanced financial position for the coming year.

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“Consequently, the authority is currently working to find areas of additional savings and income to balance the budget.

“Schemes such as voluntary early retirement and voluntary severance are already underway to look at ways to reduce spend this year, with the hope to achieve a more manageable starting point for the coming year.”

While the council admitted it is facing a challenging financial position this coming year, councillors say they remain ambitious for the city’s future.

Coun McDonald added: “Since the pandemic began we have faced challenges like we have never seen before and it’s not over because we are now dealing with the financial consequences all the while still meeting the ongoing needs of our residents.

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“While we are met with one of the toughest budget gaps in recent years, due to Government cuts and the pressures of Covid, we as a council have managed our finances prudently and will ensure we balance the budget, continue to provide much needed services to residents and put Sheffield first."

What funding does the council get from the Government?

This year’s Government Spending Review highlighted there will be no additional funding given to local authorities to tackle the ongoing impact of Covid.

Instead, local authorities can expect a share of the £1.6 billion funding for councils for 2022/23 but how this money will be distributed is not yet known.

Sheffield City Council anticipates it will receive £15 million, which is not sufficient to close the budget gap and does not compensate Sheffield, and other local authorities, sufficiently for spiralling costs or mitigate the impact of Covid-19.

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What are the budget proposals?

Its budget proposals include an increase in Council Tax, in line with the Government’s Spending Review.

This allows councils to increase Council Tax by up to 1.99 per cent with an additional per cent precept to help cover adult social care costs. This will see a total increase of 2.99 per cent applied, raising an extra £6.71 million.

What are you invited to comment on?

The consultation asks people to think about how Sheffield City Council spends and collects money, and what areas it should spend more, less or the same on in order to balance the budget, including:

Revenue - covers the day-to-day running costs of our services, such as schools, adult and children’s social care services, planning and leisure Capital - pays for buildings, roads and housing and for major repairs to them Fees and charges - collected for a number of different services such as social care, building control, parking, bereavement, hire of facilities, licensing, sport and leisure, libraries, waste services, planning and more.