I have waited to comment on the situation in part because I'm really not sure what's going on and in part because I don't have access to the most reliable information. My opinions, therefore, are based less on solid facts and more on my impressions and observations from living and working in the department for over two years and with continued work in the department for an additional two-and-a-half years. Even so, the Bibs department has been the University's neglected step-child for some time, from a general lack of support for replacing faculty to a general view of the physical space inhabited by the Bibs department (on the 11th floor of the Arts Tower) as expansion potential for the Philosophy department (on the 12th floor). The department, admittedly, hasn't maximized the use of its space, but that problem could have been addressed without threatening the department as whole.
Despite all of this, the Biblical Studies department at The University of Sheffield[.] has a worldwide reputation and is a leading institution in terms of defining and embodying biblical scholarship. Its RAE scores attest the quality scholarship fostered by the department's faculty, to say nothing of the work put out by its graduates (myself included). Unlike many (most?) other theology and/or religion departments across the UK, the Bibs department is not religiously affiliated, and this has been the source of some criticism from circles to which I belong. But in my experience, this world-renowned, unaffiliated department was a welcoming, nurturing, and stimulating environment for biblical scholarship even for a conservative, confessional scholar such as I am. Sheffield is a truly unique place to pursue biblical scholarship, and the loss of the Biblical Studies department would be a loss both to The University and to professional biblical research.