Sheffield Council pledges more action to tighten up budget overspending as costs rise

Like councils all over the UK, the authority is battling to cope with rising costs and increased demand for some services, such as child and adult social care, against a backdrop of overstretched budgets.

The council’s final financial outturn position for 2023-24, presented to a meeting of the finance committee yesterday (June 19), showed that the revenue budget overspent by £15.6m, approximately 3.1% of the total.

The overspend actually improved by £14m. The report noted: “This was mainly due to additional income received rather than underlying improvements in budgets and cost reductions. The underlying budget issues still remain, and this is reflected in the final outturn position for 23/24.”

The £15.6m will be covered from council reserves of £27.6m.

The finance committee agreed to increase its scrutiny in areas such as adult health and social care, which overspent by £2.7m, and education, children and families services, overspent by £12.6m.

Difficult

Homelessness support cost the council £8.4m and the housing revenue account was overspent by £5.2m on council home maintenance and repairs.

Jane Wilby, council assistant director of finance and accounting, said: “It becomes more difficult every year as we’ve got more savings to achieve.”

The main children’s services budget difficulties involve the increased cost of residential placements, costing an average of £6,200 per week, plus rising demand in home to school transport costs, which caused a £3.5m overspend.

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Ms Wilby said that the council now supports 2,444 children with transport to school, an increase of around 1,000 in four years.

Finance manager Damian Watkinson said staff are working to get programme managers to be more realistic about budgets because they can be “too optimistic” about what services they can actually deliver.

Committee deputy chair Coun Mike Levery spoke about housing repairs. He said: “We were categorically assured 15 months ago that the big increase in budget that they got would be kept to. We find it’s now £7.7m overspent.”

Control

He asked if there had been another increase in the budget “and if so, what are we doing to control their overspending?”

Ms Wilby replied that the budget is now £55m so the overspend is not as significant as previous years.

She said there had been an acknowledgement the budget had not been high enough.

She said that the budget had been hit by big increases in costs of supplies and what contractors charge. A new interim director housing will be driving further changes and improvements in service delivery.

Director of finance and commercial services Philip Gregory said that extra support will be put in place for services that continue to overspend.

He added: “We’re increasing our ability to spot where things are going wrong sooner rather than later.”

Coun Levery said: “We need a better understanding. We’re contracting a lot of work out because we’re not delivering through the core team.

“We need to understand why. We can’t carry on as in the past 12 months.”

Committee chair Coun Zahira Naz suggested asking the housing committee chair and head of housing to a meeting to dicsuss the issues.

Coun Glynis Chapman asked for action on the cost of school transport, which she said in some cases costs £100 per child per day.

Ms Wilby responded that there is a mixture of short-term and strategic work taking place to try to look at savings. She added: “I share your concerns and we are really pushing for some action in the first few months of this year.”