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Balanced budget protects services for most vulnerable

town hall and mercure
town hall and mercure

Despite a decade of cuts from Central Government, Sheffield City Council has set a balanced budget for 2020/2021 and for the for the first time in ten years will not have to make unplanned cuts to services.

Prudent planning and financial management means the authority should not have to rely on the use of reserves to balance its budget and to continue delivering essential city wide services.

A predicted funding gap of £35million will be met from an additional £15million of service savings, an additional £9 million from Business Rates and an additional £11million from Council Tax.

Councillor Terry Fox, Deputy Leader and Cabinet Member for Finance and Resources at Sheffield City Council said: “Brexit and the 2019 General Election have dominated the national political agenda and provide a challenging backdrop to our 2020/21 budget. There has been little Central Government focus on the domestic issues that matter to the people of Sheffield, such as the continuing and increasing pressures on our health and social care services, the climate emergency, and air quality issues.

“The Council has seen nine years of cuts to Central Government funding for local services, so the announcement in the September 2019 Spending Review that, for the first time in ten years, additional funding would made available for 2020/21, was welcome.

“This additional funding means we don’t have to make unplanned cuts to services in 2020/21. However, like the rest of Local Government, we continue to call for additional resources. The additional 2020/21 funding addresses in-year cost pressures, but does nothing to reverse the cuts of the previous nine years. This one year settlement gives us no certainty beyond 2020/21 so we hope that a further settlement covering 2021/22 to 2024/25 will be announced in the summer, to allow us to plan for services over the medium term rather than year-to-year.”

Like all councils, Sheffield has faced rising cost and demanding pressures for services to its most vulnerable citizens, in particular those who need children’s and adults’ social care. The council prioritises these essential preventative services, which help people to live independently, improve people’s lives and relieve financial pressures on the NHS.

The Council continues to work with partners across Sheffield, particularly in the NHS, to strengthen its preventative and community based services, to provide the best outcomes possible for the people of Sheffield. The city’s future financial sustainability relies on further progress in this area in the coming years.

Cllr Fox added: “We know that quality social care services play a huge role in preventing the deterioration of people’s health, meaning they can live independently and safely in the community, and leave hospital in a timely manner. It’s generally accepted that community-based care provides more positive outcomes for people, as well as being significantly less costly than hospital-based medical treatments. The lack of funding for preventative services puts huge operational and financial pressures on the NHS.

“In addition, as our population ages, the rising cost of social care for our elderly residents remains an issue that urgently needs addressing. It is accepted by most health professionals that the current model for adult social care is unsustainable. 

“However, despite various reviews over the past 20 years, to date no solution has emerged from Central Government, and one is urgently required.”

In last year’s budget £11.2m of reserves was used to fund the 2019/20 budget Gap, but the planned savings for the coming budget have prevented this unsustainable position and there is no planned use of reserves to balance the 2020/21 budget.

Subject to Council approval, the Council Tax rate will increase by 3.99%. This is includes 1.99% for the Core Council Tax and 2% for the Adult Social Care Precept.

The total level of service savings proposed for 2020/21 is £14.7m and covers categories such as service effectiveness, cost reduction and staff savings. Staff savings are expected to come from natural reductions such as voluntary early retirement or redundancy.

Although savings have to be made, Sheffield City Council is determined to maintain strong ambitions for the City, and not to retreat into providing only statutory services. But the authority warns that without solutions from Central Government to tackle rising social care pressures, this ambition continues to be a huge challenge.

Cllr Fox added: “We want to see our communities grow and be sustainable. These communities must to contribute to a high quality of life and provide opportunity and choice for everyone, within a safer, stronger, cleaner environment. 

“We can achieve this by decent, affordable homes, a diverse, inclusive and safe community, and through access to jobs, green spaces and services. Giving people the chance to be involved in and make a difference to a community, where they want to live and work, now and in the future.

“We can achieve our climate change goals by making use of natural resources, enhancing the environment, promoting social cohesion and inclusion and strengthening our economic prosperity. 

“We cannot achieve this with short-term across-the-board cuts to budgets, which we’ve resisted throughout the last ten years. Instead, we have maintained a programme of strategic changes to services, adopted new technology, focussed on the needs of each individual, and sought to provide streamlined services, but there is only so far we can innovate and deliver under such pressure.”

A balanced budget for 2020/21 is recommended to Council for approval, and sufficient reserves are being retained to protect essential services in the short-term if further Central Government funding reductions occur after 2020/21.

However, the Council hopes that Central Government will maintain the approach to funding started in 2020/21 and provide additional funding from 2021/22 onwards. This will be essential if the Council is to protect and invest in the services that are key priorities for the people of Sheffield.

The Budget proposal will be presented for approval during the Cabinet meeting on 19 February.

The report is available here.