Derbyshire County Council considers 4.99% tax rise and nearly £19m of cuts

The cash strapped local authority is considering its budget plans for the next year

The Entrance To Derbyshire County Council's County Hall, Off Bank Road, In Matlock
Author: Matt SoanesPublished 27th Jan 2025

Cash-strapped Derbyshire County Council aims to achieve a balanced budget for the 2025-26 financial year with plans to raise council tax by 4.99per cent and by introducing £18.6m of savings and cutbacks while expecting further saving plans in the years to follow.

The Conservative-controlled council’s Cabinet is due to consider the Revenue Budget Report for April, 2025, to April, 2026, when it meets on January 30 before it is presented and discussed at a Full Council meeting on February 12.

Details of the report include budget saving proposals for 2025-26 totalling £18.6m and a recommendation to raise council tax by 4.99per cent as well as details of how the authority aims to manage and spend a proposed £769.7m overall net budget for the coming year.

Council Leader, Cllr Barry Lewis, said: “We have made no secret of the fact that our budget situation remains hugely challenging and the pressures on our services, particularly around adults and children’s social care, continue to rise.

“The factors causing these pressures are beyond our control but we are doing everything in our power to keep the council on a financially stable footing.

“The robust savings plan agreed at the beginning of 2024 is on track to achieve 100per cent of its target in the current year, and we are confident that, if it is agreed, the new savings plan put forward for the year ahead will do the same.

“We are still having to make difficult decisions but are building on the hard work already put in to ensure this council stays on track financially and can continue to deliver the vital services people depend on.”

The council has confirmed it is on track to achieve £31.3m of savings by the end of the current 2024-25 financial year on March 31, 2025, after it has been rolling out some controversial cutbacks to manage a previously forecast budget deficit of over £39m for the current 2024-25 financial year.

It had also been looking at an overspend of £28.3m driven by demands particularly on adult social care but this has been reduced to a forecast overspend of £25.9m.

The report explains that the impact of external factors beyond the council’s control are continuing to put finances under huge pressure, including pay and price inflation and a continuing increase in cost and demand for services, especially for children’s services and adult social care.

It also highlights the authority’s reserves position which the council says is at an adequate level as well as its Five-Year Financial Plan which includes more savings that need to be achieved by 2029-2030 to maintain its financial sustainability for the year ahead and over the course of the Five-Year Financial Plan.

The report explains there is currently a funding shortfall for 2025-26 of £20.5m but a list of £18.6m of budget savings proposals have been identified and the remaining funding shortfall of £1.9m for 2025-26 would be met from reserves to close the gap.

Deputy Council Leader, Cllr Simon Spencer, who is also the Cabinet Member for Corporate Service and the Budget, has confirmed that the council’s General Reserve position will be safely in the region of £35m as in the report’s plans after he explained this cannot go below £25m.

The General Reserve position will also be protected by available Earmarked Reserves set aside specifically for budget management.

Cllr Spencer said: “We are focussing on the most effective ways to deliver savings and identifying ways to reduce the increasing pressures on services.

“This includes changing the way we work overall as a council and fundamentally changing our operating model to ensure we are working as ‘One Council’, bringing some functions together as well as challenging all expenditure.

“Real savings can be found this way, and it’s interesting to note that during the budget consultation held at the end of last year 60per cent of respondents supported the option to combine with Derbyshire district and borough councils to form a single tier local council.

“Measures we currently have in place include vacancy management, reviewing vacant posts and freezing or deleting them where appropriate.

“We’re also reducing expenditure on procurement to only spend money on essential areas and reducing our spend significantly around buildings we no longer use, selling those that are surplus to requirements which saves on high running costs, and reinvesting capital receipts where funds are needed and supporting keeping our borrowing levels low.

“It’s important to remember that over the past 13 years we’ve saved £300m and by the end of this financial year that figure will rise to £330m, with a predicted rise to £368m by 2026.

“That’s why we’re having to make these difficult choices, and why we’re continuing to lobby government for extra funding, not just around adult care and children’s social care but extra funding for roads maintenance too.

“We have been hearing a lot about there being extra money for fixing potholes but this year we have actually received less additional funding.”

Derbyshire County Council’s proposal to increase council tax by 4.99per cent for the 2025-26 financial year is just below the maximum rise permitted by Government of 5per cent which would trigger a local referendum.

The 4.99per cent total would be made up of 2per cent to go directly towards adult social care costs and 2.99per cent for general council expenditure and the council tax rise would raise an extra £31m, according to the council.

Derbyshire County Council explained the proposed rise would see a Band B household paying an extra £60.22 per year, or £1.16 per week, and a Band D household paying an extra £77.43 per year which is equivalent to £1.49 per week.

Cllr Spencer has said that the Government’s decision to increase employers’ national insurance payments is expected to create a further significant expense despite the promise of some dispensation for councils.

He has also questioned the details of a list of pledges concerning Government settlements for local authorities that he claims do not do ‘what they said they were going to do on the tin’.

And the concerned council has sent a strong response to the Labour Government’s Ministry of Housing, Communities and Local Government about the Provisional Local Government Finance Settlement highlighting details of the financial pressures the council is facing.

The council has stated Local Government needs more funding than has been allocated to continue providing vital services and to maintain financial standing, and it has expressed disappointment that insufficient new money has been made available to help councils pay for areas such as children’s services where there has been an unprecedented increase in costs.

The Cabinet’s latest budget savings plans for 2025-26 include: The use of AI tools to streamline and automate planning for adult social care; A review of current extra-care housing schemes; Centralisation and redesign of council support services; A review of transport provision for people using adult social care services; Improving support to reduce hospital stays and maximise independence; Council property rationalisation by reducing its number of properties; Environmental waste and recycling reforms; And making savings in senior management costs in light of Local Government changes including the new East Midlands Combined County Authority.

Cllr Spencer has also said that redundancies can never be ruled out but he added that the authority will do its best to avoid any compulsory redundancies by any means possible.

Many of the new savings proposals, if agreed, will be subject to further Cabinet reports followed by public engagement or public consultation before any final decisions.

Hear all the latest news from across the UK on the hour, every hour, on Greatest Hits Radio on DAB, smartspeaker, at greatesthitsradio.co.uk, and on the Rayo app.

Rayo PremiumRayo Premium

Greatest Hits at Breakfast

Greatest Hits Radio (South Yorkshire)