Bigger Budget Cuts Destined for Sheffield – Press Release

Sheffield City Council News Release

Sheffield will have to deal with greater cuts from Government than originally anticipated which will mean tougher decisions will have to be made on where tight resources could be spent.

That is the stark but realistic warning made by Sheffield City Council leaders as they continue to plan for the budget challenges from April next year.

The local authority was bracing itself for £40m worth of Government cuts in funding for 2013/14 but now expects to have a further £10m less to spend on services and deal with additional pressures such as energy bills, rising prices and increasing demand for its services.“I am passionate about Sheffield and providing good value for money services to local people but the latest news that we will be hit even harder is a real body blow and without doubt savage and unfair,” said Cllr Julie Dore, Leader of Sheffield City Council.

“Over the last two years the Council has made £141m of cuts to services as a result of the Government’s austerity programme. That equates to around £280 for every resident in this city thanks to the reduction in grants to us as a council.

“That places added strain on already stretched resources. So now we are working hard to focus on where we can possibly spend less.

“Whilst we are unable to go into detail at the moment as we now need more time to find these savings and consider proposals to take to the public, we can be certain of one thing, things will have to change as we cannot afford to stand still.

“I will not at this moment guarantee what that change will look like, what I can guarantee is that we will continue to protect services for those people who need it the most and work with businesses and our partners to make the most of opportunities to help the local economy grow and Sheffield continues to have its sights firmly set on the brightest future possible,” she added.

The Council has already drilled down on costs and saved £6m a year on IT by using an outside contractor, a further £1m could be reduced from directors’ pay bill as part of a proposed restructure which is currently out to consultation with staff affected and saving £12m this year and a further £50m over the life of the of Streets Ahead scheme to improve and maintain the city’s roads by reorganising how it is financed to save money.

“We are under no illusion that the months ahead and indeed years, are going to be the toughest we have faced in generations thanks to a double whammy of cut upon cut by the Government, “ said Cllr Bryan Lodge, Cabinet member for Finance and Resources.

“We will do all we can to reduce our spending in a fair way and minimise the impact, where we can, on our communities, However, at the moment, there is very little that we can rule in or out as we put the spotlight on our spending. It will be tough but we hope local communities will understand the position we are now put in and wherever possible work with us,” he said.

Ends

3 Replies to “Bigger Budget Cuts Destined for Sheffield – Press Release”

  1. “a further £1m could be reduced from directors’ pay bill as part of a proposed restructure which is currently out to consultation with staff affected”

    DON’T ask managers themselves if they can cut jobs in their own ranks! Demand a 50% reduction in management costs. It could be done with no effect on services.

  2. “saved £6m a year on IT by using an outside contractor”

    I’m usually against outsourcing but, frankly, if it saves this much then maybe Labour (not the Blairites of course) should drop their universal opposition to it.

    “saving £12m this year and a further £50m over the life of the of Streets Ahead scheme to improve and maintain the city’s roads by reorganising how it is financed to save money.”

    I have to ask, if these savings are possible why weren’t they made earlier, say, 5 years ago when the going was good?

  3. Matthew, many thanks for your comments. I’ll try to answer the points you raised across both posts.
    With regards to the £1M on senior manager’s pay, the consultation is not to ask if they can cut the numbers, it’s part of the Managing Employee Reduction (MER) process that the Council undertakes with any reduction in numbers across services. In this instance, a new management structure has been agreed upon and a number of posts are identified as going, with others merging to provide a more streamlined structure. This will contribute to the overall saving of £1M in next year’s budget.
    Outsourcing of services may be for a number of reasons that includes financial savings but it may also be to modernise a service and provide investment to the service. Private contractors carry the risk in these situations whilst the council and service users gain from an improved/ more efficient/ modernised/ value for money service.
    We managed to identify the saving for the Streets Ahead project before the contract was signed by reorganising the finace model. Overall, the scheme is financed by a grant from the Government, contributions from the council’s Highways Maintenance budget and investment by the contractor. The contractors were looking to finance their contributions through commercial lending however, it became clear that by SCC making cash contributions up front, at specified intervals in the contract to coincide with the initial investment period, the borrowing requirements for the contractor would be reduced, with a subsequent reduction in their financing costs. Council’s can borrow money cheaper through the Public Works Loan Board (PWLB) than through commercial channels. In effect, SCC borrows the money, the contractor finaces the borrowing and the savings are passed back to the council. The savings weren’t possible previously as the major capital investment wasn’t there. The grant, agreed under the previous government but cut under the current coalition, is to make good the highways, etc and restore them to a good condition during an initial five to seven year investment period; the council’s contribution is to maintain at that level over the remaining life of the contract.
    Although a little long, I hope this answers your questions.

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