Council facing eye-watering maintenance bill of more than £250m

Sheffield Council could be facing a bill for more than £250m to simply maintain the properties and assets it owns over the next five years if it does not take urgent action to reduce the costs of its estate, it has emerged.

After a total estimated cost of £218m was revealed in late 2021, Now Then filed a Freedom of Information request to understand what one report calls a “crisis point” for the Council’s estate.

The detail comes after the Council recently revealed that it would spend £14.5m of its reserves to plug a gap in its 2022-23 budget — caused in part by a drop in income during the pandemic and a huge increase in social care costs — and that council tax will rise in Sheffield by a further 2.99% this year.

Money for essential maintenance 'does not scratch the surface'

The Sheffield Land and Property Plan shows that late last year the Council was facing backlog maintenance costs of £32.6m for its properties and assets, “the bare minimum of works required to keep our buildings open, safe and in compliance with the law.”

Now Then can reveal that this figure includes:

• More than £8m for urgent and overdue maintenance work on Sheffield Central Library.

• £4.5m for 28-58 The Wicker, which appears to include a row of shops and the Sheffield And District African Caribbean Community Association (SADACCA) building.

• Around £3.7m for parks, recreation grounds and cemeteries across the city, including almost £930,000 for Graves Park and more than £837,000 for Concord Park.

The plan, approved by the Council in October, said that the “mere £7.9m” earmarked last year for essential compliance and maintenance for 2021-2024 “does not even scratch the surface.”

“In other words, we’re spending a fraction of what is actually needed to keep people safe and comply with our legal duties,” it states.

At last week’s Council Co-operative Executive meeting it was revealed that overdue maintenance costs for 66 schools looked after by the Council had risen above £45m and that it would take 12 years to clear the backlog under current budget allocations.

This new information suggests that the Council’s total overdue maintenance backlog could be closer to £78m.

Condition of buildings 'reaching crisis point'

A briefing document prepared by Council officers last year noted that “the condition of many [of the Council’s] buildings is reaching crisis point.” It acknowledged that “whilst significant progress has been made in managing the estate to reduce operational running costs and raise much-needed income, there is still more to be done.”

On top of repair costs which are urgent or overdue, the Council expects to incur at least a further £185m of maintenance costs related to its estate over the next five years.

A breakdown provided to Now Then by the Council shows that this figure includes:

• An eye-watering £42.6m for Sheffield Town Hall.

• £12m for the Moorfoot building, another of its core assets.

• A notional £50m for academy schools and £33.4m for other schools.

• £20.5m for parks, recreation grounds and cemeteries.

Most of the estimates were arrived at through condition surveys carried out by a private consultancy firm, while some core properties like the Town Hall were assessed in-house.

We asked the Council what it is doing to meet both the overdue and the expected maintenance costs on its estate over the next five years. Councillor Cate McDonald, Executive Member for Finance and Resources, said the Council had “allocated £8.6m over four years for the most urgent work.”

“The schedule and funding for this work is prioritised on a health and safety and compliance basis.”

The Land and Property Plan says that in response to the mounting maintenance backlogs the Council will reduce the running costs of its estate by 25%, and generate £3m of revenue income and £8m per year from “capital receipts” - the ‘disposal’, or sale, of its properties and assets.

The document says the Council needs “to take some difficult decisions” — but does not say what this might involve.

Asked what it is doing to meet the commitment of reducing the running costs of its estate by a quarter, Councillor McDonald said the Council is “looking to reduce the size of its estate and condense its service delivery into a smaller, more efficient footprint.”

She said that hybrid working could help the Council reduce its requirements for office space and that it might look to reduce its depot space.

“We are also exploring how green technologies such as LED lighting, as well as sharing assets with our partners and voluntary groups, can help to ease running costs.

“As the council looks to streamline its assets, we will ensure that the properties we retain are well maintained and fit for purpose to support our ambitious service delivery goals and meet the needs of our diverse communities and businesses, today and into the future.”

The Council did not directly respond to a question from Now Then about how it plans to balance its need to sell assets in order to raise revenue against other critical needs, like preserving the city’s heritage and protecting community use of Council properties.

'Systemic failure of a Council department'

Nigel Slack, an 'active citizen' with understanding of the wider issues in Sheffield, told Now Then that although the Council had faced huge budget cuts from central government since 2010 — more than £2bn — the problems with its estate pre-dates these cuts.

"This is not an issue of party politics; this is the systemic failure of a Council department over 20+ years, putting community and heritage assets at serious risk," he told Now Then.

"There appear to be no attempts to look for alternative sources of funding for solving this problem. Where are the approaches to Historic England, Lottery funding? This is not an issue that can be solved through minor internal fiddling with costs and selling off valuable assets in some sort of fire sale."