Efficiency and savings help towards setting budget for next year

Proactive efforts towards efficiency and savings are helping set a more balanced budget for the next financial year.

A report presented to today’s (Monday 16^th December) Finance and Performance Policy Committee showed that, at this stage, the Council is on course to set a balanced budget, with a budget gap of £1.7m for 2025/26 yet to be identified and work ongoing to do that.

This figure includes provisions announced in the Government’s Autumn Budget and subsequent policy statement.

Now, the Council’s annual budget consultation is set to begin.

In July this year, the gap for 2025/26 was projected to be £31.4m.

All Council services have been striving to make savings and improve efficiencies this year, and the latest financial outlook shows some achievement towards this. Additional savings and mitigation of £22.4m have been identified since the publication of that report.

However, there is still much work to do – both in the short-term and in balancing the Council’s longer-term financial situation, which remains in a challenging position as highlighted in last month’s (November) quarterly budget report.

If savings targets do not continue to be met, this would severely damage the Council’s financial resilience further. Efficiency work targeted via the Future Sheffield program will continue to identify further savings.

The report to committee comes ahead of the launch of this year’s public budget consultation, which will ask for the views of Sheffield residents on how the Council should prioritise its spending next year.

The budget proposals also consider the level of Council Tax for the coming year. While all local authorities strive to keep this as low as possible, these challenging financial circumstances make that difficult. A Core Council Tax increase of 2.99% for 2025/26 is currently being supported to help mitigate rising costs and increasing service pressures – with a further 2% increase for Adult Social Care services.

Cllr Zahira Naz, Chair of the Finance and Performance Policy Committee, said: “There remains a big challenge ahead of us, but we remain on course to tackle those financial concerns. Now, we want the people of Sheffield to tell us about the services they value the most so that we can prioritise spending in these areas and make sure we continue to serve our communities in the ways they want us to.”

We want to hear what the people of Sheffield think of these proposals, including the specific proposals for key areas such as transport, regeneration and climate; housing; adult social care; education, children’s and families; and communities, parks and leisure.

Feedback from the consultation will help shape the final proposals that will then be debated by all councillors at Full Council in early 2025 when the budget will be agreed.

The consultation is due to open this week. All responses will inform the final budget proposals.

The full budget report presented to the Finance and Performance Policy Committee can be viewed on the Council website.

Please note:

• There will likely be a change in the financial outlook again following the publication of the Local Government Finance Settlement (LGFS) this week
• There remains particular difficulty in overspends relating to:
  - Adults and children’s social care services
  - SEN home to school transport
  - Additional support for families with no recourse to public funds (NRPF)
  - Increased costs of caring for children with disabilities
  - A greater demand for services provided by our Multi Agency Safeguarding Hubs (MASH)
• Efforts to improve spending in these areas includes the development of accommodation to house Children in Care to provide better outcomes for children and more affordable placements, and investments in adult social care to improve capacity and services with view to delivery of long-term savings