Warning over council's expected £34m overspend

A report to be seen by Sheffield councillors suggests a "difficult outlook" for the authority

Sheffield City Council is grappling with "significant financial challenges", meaning it is projected to overspend by £34m in 2024-25, councillors are to be warned.

The overspend was spread across several "key" service areas and amounted to 7% of the authority's net revenue budget, according to a new report.

Members of the council's strategy and resources policy committee will be told that the authority was experiencing "a more challenging financial landscape" than in the previous financial year.

While it could avoid declaring bankruptcy by using its reserves to balance the budget, the “financial outlook remains difficult”, councillors will hear.

'Growing pressures'

The expected overspend totalling £34.3m in 2024-25 had stemmed from increased service demand, rising costs and reduced funding, the report said.

Meanwhile, there was “limited scope" for help from goverment "amid growing pressures across the public sector, including the NHS, schools and higher education institutions”, it added.

According to the Local Democracy Reporting Service, areas affected included housing and homelessness, adults and children’s social care and special educational needs home-to-school transport.

According to the report, the previous financial year had seen the council overspend by £15.6m which had been funded through its reserves, leaving a remaining balance of £27.6m.

While one-off funding and provisions had helped mitigate many of the issues faced in 2023-24, the council now faced "a more challenging financial landscape", it said.

Councillors are expected to consider the report at a meeting on Thursday

However, the report added that alongside a "corporate provision" of £7.9m, "the council will be able to manage the budget for 2024-25".

The authority's approach to dealing with the challenges it faced was centred around the "Future Sheffield" programme, it said.

That aimed to "transform services to create a more sustainable and efficient operating model".

Sheffield City Council's strategy and resources policy committee is expected to consider the report's findings on Thursday.

Listen to highlights from South Yorkshire on BBC Sounds, catch up with the latest episode of Look North or tell us a story you think we should be covering here.