‘Austerity’ council overspent by £5.8m

Leaders at Labour-run Sheffield Council said they were hoping to claw back the overspending by making efficiency savings and not through reductions in front-line services in the city.

A report reveals that the authority has reduced the overspending from £7m in June, but it must be completely wiped out by March or added to the cuts required in the next financial year.

Savings required in 2012/13 currently stand at £56m, under the council’s strategy to save £219m by 2014, a cut which has been demanded by the Government.

In a report to the authority’s ruling Cabinet, which is due to meet tomorrow, officers say the main area of overspending is £3.15m in children’s services, while many other departments have smaller totals of tens of thousands.

Problems have also arisen with the council’s waste contractor Veolia, which is due to make £800,000 savings which have yet to be agreed and an overspending of £860,000 in planning due to a “shortfall in income” after applications dried up.

Labour leader Julie Dore faced further pressure yesterday when her Lib Dem opponents claimed she had reneged on a promise not to use public funds on the controversial restoration of the city’s Park Hill flats.

The Lib Dem group said Coun Dore’s predecessors, who were in charge of the council when the project was approved, vowed not to give financial assistance to private developer Urban Splash,

Yesterday opposition spokesman Alison Brelsford said she had learned the council was due to pay out £2.5m in council money to keep the scheme on track.

Coun Brelsford said: “I’m sure taxpayers would agree that £2.5m would be better spent on local services than on posh flats. Labour should think again and demand Urban Splash pick up this extra cost. It is their shareholders who will be making the profit.”

Coun Dore was not available for comment last night.