Sheffield, which needs to save pounds 35.5m and faces a shortfall of over pounds 11m, has been badly hit by the recession, lack of government sympathy and the legacy of the World Student Games staged in the city last year, losing pounds 10m.
Today's strike, which could be followed by further industrial action, coincides with a council meeting to discuss the cuts.
Few departments will escape the cuts and the effect will be seen in schools, libraries, community homes, housing and streets.
The city's critics accuse the Labour-run council of profligacy, financial mismanagement, setting out on grandiose development schemes and of ignoring ominous financial signs. However, the city has had to cope with enormous social changes over the past decade, the loss of much of its traditional industry and recently the rejection by the Government of much- needed city challenge funding.
Sheffield has turned its attention to developing some of the finest facilities in Europe including shopping malls, sports stadiums and a highly successful concert hall, the Arena. Until 1989, Sheffield had spent less on leisure facilities than any other comparable area in Western Europe.
Now the city has the Ponds Forge International leisure centre hosting competitive swimming and diving championships. The Arena doubles as one of the best- equipped indoor events centres in the country and as a concert venue.
All these developments were linked to the World Student Games, staged in the city with a mixture of pride and prejudice. The games were a huge success which the city fathers hoped would attract much-needed inward development and attention. But the recession has bitten hard and tonight the official auditor's report on the games will be released, making even more grim reading. The games cost pounds 147m to stage and produced a loss for the authority of more than pounds 10m.
Mike Bower, leader of the city council, said: 'The fundamental problem we face is that we are underfunded by government. We have campaigned for this to be changed for a long time. It is true we did expect a change of government, not that we wanted to be bailed out but thought there would have been helpful changes. There is now silly talk of us going bankrupt. There is no possibility of that but we do have problems.'
He added: 'We are being unfairly and wrongly treated. We have always stayed within the regulations, not been surcharged and never been in an illegal position.'
Two years ago, the authority had to make cuts of pounds 5.5m. Now the unions are trying to avert compulsory redundancies, which seems almost impossible. David Granville, a Nalgo spokesman, said: 'Cuts have been made over a number of years and some 6,000 jobs have gone so we are not talking about cutting spare capacity out or trimming the fat, we are down to the bone.'
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