City to shed 1,000 jobs to help balance budget

ABOUT 1,000 jobs are to be axed by Sheffield council as part of an effort to balance the city's budget, and eradicate a pounds 7.25m deficit.

The measure was announced by Mike Bower, leader of the city council's ruling Labour group, after a series of crisis meetings over the weekend to discuss a Section 15 notice issued by the district auditor warning that action would have to be taken over the worsening financial situation.

Section 15 or 'public interest' notices are issued under the 1987 Local Government Act, and are used very rarely. They are, in effect, a public warning that further action could be taken if the district auditor is not satisfied with the response; he can subsequently initiate legal proceedings, which could lead to the surcharging of councillors and disqualification from public office.

Mr Bower said: 'We have asked officers to spell out options of pounds 14m of cuts, to give us some choice . . . I can't confirm or deny whether this will involve compulsory redundancies as I don't know yet. We'll certainly have to reduce staff levels, and I can't guarantee there won't be compulsory redundancies. Roughly 1,000 jobs will have to go, and we're hoping they will be by voluntary redundancy, depending on the level of co- operation from the unions.

'We had taken action earlier in the year that we believed would balance the budget, but the treasurer has told us that it won't.

'There are longer-term discussions on the structure of social services, which will include privatisation.'

A loss of more than pounds 10m on the World Student Games has been largely responsible for Sheffield's immediate crisis, but according to the opposition Conservative group leader, David Heslop, many of the city's problems pre-date this. 'It goes back to David Blunkett's time as leader, during rate-capping, when they tried to buck the system, set the rate late in 1985, and borrowed up to pounds 90m under deferred purchase, and the city's now into repayment of these debts.' Mr Heslop also criticised the council's failure to balance the budget this year. 'It contained about pounds 13m of unspecified cuts, because Labour thought they'd win the election, and the change of government would bail them out.'

A source close to the Labour group leadership said the group was taking the matter seriously, but was 'not panicked about it'.