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Council sets out major budget challenge as pandemic pressure continues

Town Hall and Peace Gardens

Sheffield City Council is preparing for a challenging financial position following the enormous demands placed on services during the Covid pandemic but remains ambitious for the city’s future.

The authority is currently predicting an overspend of around £44million from 2021/22, caused by continuing additional spending on Council services in response to the pandemic, such as support for families and older people in need, and the expected end of Covid-related funding from the Government. 

Covid-19 continues to place unprecedented demands on health and social care services. Throughout the pandemic, the council has not hesitated to meet the needs of Sheffield’s communities, but now faces a challenge like never before to achieve a balanced financial position for the coming year.

The Government is currently conducting a comprehensive spending review, but it is not clear what this review will mean for Sheffield, and details are not expected until early December, at which point it will be too late to manage the situation.

Despite last week’s announcement from Government of additional health and social care investment, it is not expected that this money will be allocated locally, or that councils will be sufficiently compensated for the spiralling costs they have faced in the last 18 months.

Sheffield City Council acknowledges that it must take action now in order to plan and prepare for the difficult time ahead. The 2021/22 budget predicts an overspend of £44million, and schemes such as Voluntary Early Retirement (VER) and Voluntary Severance (VS) 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.

Councillor Terry Fox, Leader of Sheffield City Council, said: “We have faced challenges in the last 18 months like we’ve never seen before, and it’s not over because we’ve now got the financial consequences to deal with and the ongoing needs of our residents.

“I’ve raised this before and I’ll continue to raise this as an issue – 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%) – the equivalent of £383 for every Sheffield resident. This is above average for the rest of England.

“It’s hard-working people who continue to shoulder this shortfall of funding. Enough is enough, the Government has to take responsibility.

“Without more details from the Government about how we’ll be supported it’s a very uncertain position for us to be in. That’s why we can’t wait. We’re doing everything we can now to reduce our overspend, prepare for the year ahead and limit the impact on the services people rely on.

“Changes and compromises will have to be made, but we will keep putting our residents and this city first, and make sure essential services are prioritised.

“On top of that, we remain ambitious for the future of this city. We’ve committed to our One Year Plan, which will lay the foundations for doing things better, smarter and for the good of our communities and we’re determined to make that happen. Our Local Area Committees will help us make local decisions, and allocate money in the right ways for each part of the city.

“We’ll be sharing more information with local people about our plans and options as soon as possible and I want people to play their part and help us in making Sheffield the best it can be. Local Area Committee Meetings started this month, and these are all about you, so please get involved.”

Further details relating to Sheffield’s budget for 2021/22 and 2022/23 will be discussed during Sheffield’s Cooperative Executive meeting next week. The supporting documents are available to read online on the Sheffield City Council website.