Social care costs leave council in 'fragile' state

Sheffield City Council's finances are still in a "fragile position" as demand for social care continues to be high, councillors are to be told.

The authority ended the 2025-26 financial year with an £11m overspend – a significant improvement from the £28.2m it had predicted, the finance committee will hear later.

In a report, finance officers said the situation was improved by no major "adverse shocks" late in the year, however they warned this "does not mean the main cost pressures have gone away".

"Adult social care, children's placements, housing services and SEND are still facing rising demand and costs above budget. Most of the improvement this year came from one-off measures," they added.

The largest pressure on the budget was due to the cost of adult social care packages, with more people needing support and increasingly complex and expensive care, finance committee members will be told.

The council had been reviewing and managing packages and the costs per package were stabilising, but overall demand continued to rise, the report stated.

According to the report, there was significant financial pressure on children's services because of a continued demand for care, with more children placed in higher-cost residential and independent settings.

Meanwhile, there was rising demand for support such as direct payments and short breaks for families who had children with disabilities.

The report added that the budget for SEND transport was in a better position because the council had reduced single taxi journeys and increased shared transport.

More families had personal travel budgets and independent travel training but demand remained high, particularly for pupils with complex needs, it said.

"A more consistent application of policy, with reviews ensuring only eligible cases are approved, has contributed to a significant reduction in demand, with less than 100 fewer young people requiring transport than originally projected," according to the report.

The council said it still faced a "highly challenging financial environment" and there would not be any "fundamental reduction" in the pressures it faced.

The report continued: "The overspend has been managed through a combination of one-off actions and the use of reserves.

"This has helped bring the position back to a more manageable level, however, this is not sustainable in the long term. The council cannot rely on reserves to fund ongoing pressures."

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