Sheffield City Council is set to overspend by £34.3m this year amid ‘significant’ financial challenges, a report has revealed.
The report says that while the local authority can avoid issuing a Section 114 notice in the immediate term by drawing on reserves, the situation remains ‘tough’.
After three years of overspends, the council has £27.6m left in its budget contingency reserve, which it will supplement with a ‘corporate provision’ of £7.9m to balance its budget this year.
The projected overspend makes up about 7% of the council’s net revenue budget and is driven by cost pressures in services like homelessness support, social care and home to school transport.
The council report adds that the arrival of a new government has created several ‘uncertainties’ over future grant funding, ‘making strategic planning and execution more complex than ever before.’
Financial issues will be addressed through the council’s Future Sheffield programme, which aims to create a more ‘sustainable and efficient’ operating model, and the council has also said it will move to ‘priority-based budgeting’.
