SYP takes millions from emergency reserves after accounting blunder causes £65m black hole
South Yorkshire Police has been allowed to take millions from their emergency reserves, after an accounting blunder led to a financial black hole of £65million.
The shock discovery was made in September 2024, when it was found accounting errors, resulting in the multi-million pound financial shortfall, had gone unnoticed for five years.
Speaking at the time, the South Yorkshire Mayoral Combined Authority (SYMCA) said its finance team discovered £16m in charges to repay money borrowed for essential items - like police kits, IT equipment and more - had been “missed” and £49m for the remaining repayments had not been included in future budgets.
The black hole in South Yorkshire Police’s (SYP) finances led to the force becoming the first in the country to issue what is known as a section 114 (2) notice.
The notice must be made when a public body, or someone acting on its behalf, has incurred - or is going to incur - unlawful expenditure under the Local Government Finance Act 1988.
In response to the notice, the Home Office has stepped in making a “capitalisation direction,” resulting in a rule change which allows SYP to take £17m from financial reserves usually ringfenced for capital spending on assets such as buildings, it has now been confirmed.
Following the change, SYP will now be “given time to reorder its financial affairs whilst protecting frontline services,” such as day-to-day policing.
Responding to queries concerning the Section 114 notice, South Yorkshire Police’s Chief Constable Lauren Poultney stressed the force “is not bankrupt” and remains both responsive and focused on keeping communities safe.
Deputy Mayor for Policing and Crime, Kilvinder Vigurs, also told The Star that the Section 114 notice “does not mean South Yorkshire Police is bankrupt, and there is no impact to frontline policing.”
Ms Vigurs stated the £17m does not constitute “new funding”; and it is understood the capitalisation direction means it will be possible for one-off exceptional costs to be spread over an extended period of time, with payments built into the existing budget.
In a letter to the Home Affairs Select Committee, the Minister of State for Policing and Crime, Sarah Jones MP, said it was hoped the “capitalisation direction,” would allow SYP to correct an “unforeseen financial error which, if left unaddressed, would have prevented them from setting a balanced budget and maintaining efficient and effective policing in future years.”
Ms Jones said the financial predicament faced by SYP reflected a “a rare and exceptional set of circumstances, including historic accounting issues and ongoing costs related to legacy issues, including legal settlements.”
Chf Con Poultney continued: "Since identifying budget issues in September 2024, South Yorkshire Police has worked closely with SYMCA and the Home Office to stabilise our finances, protect frontline services and plan for future investment. Through efforts to secure more funding, agreeing sustainable repayments and implementing savings, we have set a balanced budget.
“The force is not bankrupt, and the public can be reassured that policing in South Yorkshire remains responsive and focused on keeping communities safe. We will continue working with partners and support the Mayor’s independent review into how the error occurred.”
Last week, SYMCA mayor, Oliver Coppard, said he was considering a rise in council tax to help with police funding, and asked residents to share their views on the proposal.
The financial shortfall was discovered after Mr Coppard assumed the role of Police and Crime Commissioner (PCC) in May 2024, taking over from Dr Alan Billings.
Kilvinder Vigurs was subsequently appointed as Deputy Mayor for Policing and Crime, with the SYP accounting error amongst the areas included within her remit.
Ms Vigurs, said: “When South Yorkshire’s Mayor Oliver Coppard took on Police and Crime Commissioner responsibilities in 2024 from the former Office for Police and Crime Commissioner, South Yorkshire Mayoral Combined Authority (SYMCA) staff uncovered an accounting error relating to debt repayments dating back to 2020 as part of their financial due diligence work.
“This led to SYMCA’s Chief Finance Officer and Monitoring Officer issuing a report which discharged the duties set out in Section 114 Subsection 2 of the Local Government Finance Act 1988, to publicise the identified problem and requiring a response.
“This part of the Act is distinct to Section 114 Subsection 3 of the Act which is more commonly used to indicate an inability to set a balanced budget. Therefore, it does not mean South Yorkshire Police is bankrupt and there is no impact to frontline policing.
“Since that report, SYMCA and South Yorkshire Police set a balanced budget for financial year 2025/26 and are in a position to set a balanced budget for financial year 2026/27. There is, therefore, no intention nor requirement to consider a Section 114 Subsection 3 notice as available resources are adequate to meet proposed expenditure for the financial year.
“The identification of the accounting and budgetary omissions does, however, place material strain on the financial health of the South Yorkshire Police Fund, exacerbating financial challenges felt by Police Forces across the country.
“Both SYMCA and South Yorkshire Police have set about resolving these issues with pace and transparency. The Mayor of South Yorkshire commissioned an independent review by the Chartered Institute of Public Finance and Accountancy (CIPFA) into the circumstances of the omissions, and in parallel, significant progress has been made to address the financial challenges. The review is in its final stages and will be published in due course.
“The Government have been supportive through the provision of funding, technical interventions, and the award of a capitalisation direction. This direction affords SYMCA time to reorder its financial affairs whilst protecting frontline services, but it does not constitute new funding.”
In November 2025, the Government announced PCCs would be scrapped in a bid to save £100m during the course of this parliament.
Crime and Policing Minister, Sarah Jones, said: “We are providing police forces with a significant increase in funding that will allow them to step up their efforts in tackling the crimes that are blighting our communities, including knife crime and anti-social behaviour.
“But we know that funding alone will not deliver our ambitions. Police leaders have been crying out for reform, and our upcoming white paper will deliver this to free up officer time and get bobbies back on our streets.”