Council tax to increase by 5% for three years

Council tax will rise by nearly 5% each year for the next three years as a struggling local authority continues to manage its overspend, it has been confirmed.

Despite the increase, Sheffield City Council is set to receive more than £400m in government funding over three years - £25m more than with previous grants.

A spokesperson said the council was trying to cut its predicted overspend but major cost pressures include the increasing demand for housing and care.

However, they added that they were planning to introduce "prevention and early intervention services" to save £70m by 2030.

The council said it is working to get overspend below £20m but a recent report claimed many of the same cost pressures will roll over into 2026/27.

The figure quoted is £48.4m, according to the Local Democracy Reporting Service.

Another £10.3m in funding will come from a government recovery grant which is expected to end by 2028/2029.

The report said: "Cost pressures continue to outstrip increases in funding, both specific inflationary pressures in major service areas, particularly for care, accommodation and construction, and the increasing volume of demand for housing and care."

It added: "The council needs to take bold action to reverse the trend of successive overspends that the council has had to fund from its reserves."

The council's three-year plan, Future Sheffield, also includes improved customer services, more joined-up working across departments, using technology to work "smarter" and better engagement with communities and businesses - all to save money.

The programme has estimated a total savings of £10.3m from these changes for 2026/27.

Philip Gregory, the council's finance director, said: "For several years the council had to use its reserves to achieve this situation because of historic underfunding."

He added: "The three-year settlement gives the council some breathing space to plan better to avoid getting into the position where we're constantly overspending year on year."

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