Council 'grappling' with £70m budget shortfall

Sheffield City Council says it is "grappling with significant financial challenges" as it forecasts a budget gap of £70m over the next four years.

A council report said the shortfall was in part due to continued pressure on high-demand services such as social care and the "situation remains tough".

It comes on top of a series of recent financial challenges due to rising costs and reduced funding, which resulted in an overspend of £34.7m for 2024-25.

The report said: "The current overspends relate to ongoing pressures in key areas including persistent demand and cost pressures in social care, growing needs in special educational needs and home-to-school transport, and an unprecedented surge in homelessness."

The report adds: "The council has been able to mitigate these issues in previous financial years using one-off funding and reserves however, these are not long-term solutions for financial sustainability."

According to the report education, children and families overspent by £16.6m, including an extra £6m in home to school transport, due to the increased demand, with over 1,000 more children being transported to/from school than pre-pandemic.

Meanwhile homelessness support went £11.7m over budget.

The report said: "The government does not fully subsidise all housing benefit payments made by the council, even though it sets the rules that determine the amount the council has to pay.

"In 2023-24, the council incurred a loss of £4.9m as a result of the legislation relating to temporary homelessness and £3.5m relating to supported accommodation.

"The council is essentially bridging the gap between the cost of the accommodation and the amount we are able to recover via housing benefits."

Councillors will discuss the report at a meeting on Thursday, 10th July.

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