Sheffield Council has increased council tax to the maximum amount possible, as members blame financial difficulties and long-term effects of austerity.

Councillors have approved a 4.99% increase in taxes, which would cost the average home £1.17 more per week. It is the largest rise possible without triggering a local election.

The Chair of Finance and Performance Policy, Zahira Naz, said the funding from the government had been “better than expected and provided much needed breathing space” to address the Council’s overspend of £26.9m.

However, the government’s funding settlement only went so far to address the deteriorating financial position the Council found itself in during the 2024/2025 period. This proposed increase in tax was made to address a £15.6m deficit from past financial years. Many, notably the Labour councillor Zahira Naz, cited the long-term impacts of austerity from the previous government, alongside rising costs of delivering services and the increasing demand on social care, housing and public services for this increase.

The council tax increase comes alongside news of a nationwide increase for energy price cap, which will cost the average household £111 per year, and only heightens fears of the effects of the cost of living crisis.

Research from the Resolution Foundation think tank raised concerns that the increase in gas and electricity charges, alongside a hike in council tax, will disproportionately hit poorer households.

A 69-year-old retiree, Anne Rogers, said in response to the tax hike, that it would lead to “less days with the heating on and less hot meals for her and her family.”

She also said that the tax hike didn’t “recognise a life of hard work and her support for the country” as a ex-civil servant.

Liberal Democrat Leader Shaffaq Mohammed said: “The next few years are going to be really challenging with national insurance increases, pressures on social care and international issues which will impact on this city.”

Even after the tax increase, Sheffield City Council will face pressures of nearly £72m, with inflation and increased demands for services by residents to blame.