Steel City’s finances in a better shape than neighbours
SHEFFIELD IS in a better financial position than neighbouring big cities following the coronavirus pandemic, say council chiefs.
The Labour- run city council had a balanced budget in March but then Covid- 19 hit. The council’s costs for the pandemic for 2020/ 21 are currently estimated at £ 82m but further costs are still emerging, and a second wave could significantly increase these. Sheffield’s financial challenge in the short term is said to be less severe than Leeds, Nottingham and Manchester.
David Phillips, head of strategic finance, says in a report: “A number of other local authorities are indicating that they are under more immediate financial pressure than we are, with their usable reserves likely to be exhausted sooner and/ or they are more exposed to significant losses on their commercial projects.
“Manchester Council has benefited from being a major shareholder in Manchester Airport, and anticipates a significant fall in income as air travel has greatly reduced.
“Nottingham Council is concerned about the impact of the crisis on income from their associated green energy venture RobinHoodEnergy ( RHE). This was already under considerable financial pressure, with cumulative losses of £ 34m by March 2019, and has just been the subject of a Public Interest Report from Nottingham’s external auditors which criticised the council for allowing other services to suffer in its efforts to support RHE.
“Leeds Council appears the worst affected Core City, with public statements that they forecast the costs of the pandemic, even after government funding, will exhaust their available reserves during 2020/ 21.”
Separately, Doncaster Council will not meet planned savings targets even with the financial support from Government to combat the economic downturn from the pandemic. The council is expecting a shortfall of around £ 5.3 million but this is manageable for the financial year.
But pressures on budgets may become more apparent in the next financial year as finance chiefs at the council say the budgetary situation is ‘ fluid and ever changing’.