Sheffield City Council set for £28.2m budget overspend
Councillors have heard an update on the projected overspend - mostly down to the ballooning cost of adult social care and children's services.
Sheffield City Council is forecasting a £28.2m overspend as it continues to battle with higher costs and demand alongside reduced funding.
A report going before the council’s finance and performance policy committee next Monday (August 11) says: “These challenges are projected to persist in 2025-26, with continued pressure expected in services such as adults and children’s social care, Special Educational Needs (SEN) home-to-school transport, and homelessness.”
The report says that the ongoing key areas of budget pressure are:
Adult social care, £31.3m overspent vs £161.8m net budget (19.3%);
Children’s services, £15.1m vs £150.4m net budget (10%);
Homelessness services including temporary accommodation £3.8m overspent vs net budget of £1.3m and supported exempt accommodation £3m overspent.
The council is putting plans in place to reduce overspending key service areas and expects the overall overspend will be brought below £20m by the end of the current financial year.
The report states: “The council is firmly committed to reducing the overspend as low as possible, ensuring that every measure taken contributes meaningfully to stabilising the financial position.
“Continuous monitoring and regular reporting will underpin this work, ensuring timely adjustments and transparency as we respond dynamically to ongoing challenges.”
The predicted £28.2m overspend equates to approximately 5.2% of the net revenue budget, the report says.
A six-month freeze on non-essential recruitment is expected to save £6m. The report says: “Only business-critical roles, those directly impacting statutory compliance or safeguarding or directly linked with an external funding source, will be considered for exemption through a clear, robust governance process.”
Another £3m could be saved by allowing more vacant posts to remain unfilled for part of the year. The report adds: “All discretionary or non-essential spending — including travel, training, and non-urgent projects —will be tightly restricted.”
A longer-term Future Sheffield strategy aims to bring spending down by transforming services to concentrate on early intervention and prevention while still delivering the services that are mandated by law.
The government is bringing in multi-year funding for councils which is expected to come into force for three years from 2026-7, the report says. This aims to help councils to plan their spending better as they will have more idea about what funding to expect.