Steps being taken to secure Council’s long-term financial position

Proactive steps are being taken to ensure the Council remains able to set out a balanced budget in the long-term, including transforming services to run in a more sustainable and efficient way.

But the short-term picture remains largely unchanged, and the Council’s reserves are able to cover budgeting gaps for this financial year.

As outlined in the Government’s Autumn Budget last month (October), the financial outlook for the country will be challenging moving forward.

Here in Sheffield that is no different, and Sheffield City Council is currently facing significant budgeting difficulties due to increased service demands, rising costs, and reduced funding. This has resulted in a projected overspend of £34 million for the 2024-25 fiscal year.

The Council remains resolute that the immediate financial outlook is not a concern. Due to carefully managing the Council’s finances in recent years, the Council’s reserves can be used to balance this year’s budget.

There remains no need to issue a section 114 notice.

But looking further ahead, it is vital the Council remains sensible in managing incomings and outgoings and making savings where possible to avoid overspends.

To address this, the Council is focusing on the Future Sheffield programme. This is a critical initiative aimed at transforming services to create a more sustainable and efficient operating model. This transformation is essential to ensure the delivery of statutory services and to drive initiatives that support city growth, aligning with the Council’s broader strategic goals as outlined in the Medium-Term Financial Strategy.

The Council will also move to a Priority Based Budgeting Model for 2025/2026 which includes assessing service budgets against a framework to evaluate alignment to the goals set out in the Council Plan.

The Government’s Autumn Budget provided much-needed support for local government and public services. But to rely solely on outside investment without proactively looking after the Council’s finances would be unwise.

This is why programmes like Future Sheffield are key to the long-term financial outlook for the Council.

Cllr Zahira Naz, Chair of Sheffield City Council’s Finance & Performance Committee, said: “As a Council we have previously spoken about taking a proactive approach to financial planning for the coming years to ensure that we deliver the vital services that the people of Sheffield need. 

“This does not change. Of course, the current position is challenging, and that will not change for the foreseeable future nationally. So we are committed to working cross-party to find solutions that enable us to continue to deliver high-quality services for our residents. The Future Sheffield programme is just one way that allows us to do that.

“The Government has committed to longer-term funding settlements to give us the certainty to plan, and last month’s Autumn Budget outlined some of those provisions, which all Local Authorities will be grateful for.

“This is very welcome, and we look forward to working with the Government to deliver the essential public services that residents rely on, while continuing to deliver a balanced and sustainable budget.”

Budget monitoring will remain constant moving forward, with updates provided each quarter.

The full Q2 Budget Monitoring Report is available on the Council website here.