City council faces £61.2m budget gap over next four years

Sheffield City Council has warned of an “incredibly challenging” period ahead, as it forecasts a budget gap of £61.2m over the next four years, of which £18.1m is in 2024/25.

The council’s Strategy and Resources Committee will meet on Thursday 7 September to consider the forecast for 2024/2025 and to explore a three to four year approach to financial planning.

In March the council agreed a balanced budget for 2023/24 which required £47m of savings to be made and did not use any council reserves to balance.

But it is now considering next year’s budget and an updated set of financial predictions, for the medium-term, covering the period 2024-2028.

Councillor Zahira Naz, chair of the Finance Committee, said: “We and other councils have had our budgets hammered by cuts from central government over the last 13 years. Demand is rising as funding plunges – there are no easy decisions left to take.

“Despite this, we know we must act for the people of Sheffield. Yes, we have to make significant savings, but we’re also looking at our approach to budget planning over the next three to four years to get us on a steady and consistent footing.

“By tackling these issues early, transparently, and proactively and cross-party, we’re doing all we can to protect the services we know the people of Sheffield rely on.

“We can’t forget that following a damaging pandemic, we’re still stuck in the national cost of living crisis – as a council we will continue to focus on supporting those who need it most. There is a mammoth task ahead of us, and every year it gets harder.”

Sheffield City Council notes funding from Government for council services has reduced since 2010, which means the council now receives 29% or £856 per resident less in real terms.

At next week’s meeting, the Strategy & Resources Committee will also review the council’s performance against savings targets for the current year so far.

The council states there is currently a forecast overspend of £17.6m for 2023/2024, adding that while this is not unusual at this stage in the year, council teams will need to work hard to bring this overspend down.

Following public consultation, the budget for 2024-5 will be discussed at Full Council at the end of the financial year.

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