Derbyshire County Council faces ongoing external financial pressures despite improvements

Pictured Is Derbyshire County Council'S Characteristic County Hall HQ, Off Smedley Street And Bank Road, At Matlock, Taken By LDR Jon Cooper.

Derbyshire County Council has revealed an improved financial position at the authority despite concerns from a study claiming councils are still facing external pressures and many will need to plug a combined multi-billion pound budget gap shortfall with more savings by the end of the next financial year.

The BBC Shared Data Unit’s study, Councils’ Continuing Crisis, found that councils across the UK will still need to meet a combined £3.8bn budget gap by the end of the 2027-28 financial year despite already planning £3.23bn of savings in 2026-27.

Derbyshire County Council’s Reform UK administration, elected in May, 2025, confirmed a net underspend of £2.009 million for 2025-26, and says it achieved the majority of its savings plan in 2025-26 with £35m saved against a target of £37m, and it set a balanced net budget for 2026-27 at £817.6m.

It says by the end of this 2026-27 financial year those savings will be closer to £57m which reflects the study’s estimated £55.3m of planned savings for the council in the same period with an estimated and predicted Budget Gap for 2027-28 – the difference between what a council expects to spend and the funding it expects to receive – as £1.58m.

Cllr John Lawson, Cabinet Member for Finance and Efficiency, said: “We are well aware of the financial challenges continuing to face councils across the country and obviously Derbyshire is not immune from these, many of which are beyond our control like rising demand and inflationary cost pressures on our services.”

Previously, the council’s former Conservative administration had to achieve over £31m of savings by the end of the 2024-25 financial year with tough cutbacks to manage a forecast budget deficit of over £39m for the 2024-25 financial year while identifying £18.6m of further necessary budget savings for the 2025-26 financial year to set a balanced budget.

The BBC study makes it clear that councils continue to face financial difficulties due to the cost of living, reduced spending power, high inflation, increasing costs and demands, particularly in adult social care, children’s social care and for those with Special Educational Needs and Disabilities.

This is despite the Government’s £1.5bn of Exceptional Financial Support for 2026-27 for some councils but not Derbyshire County Council, and its multi-year funding settlements and the Fair Funding Review 2.0.

Derbyshire County Council, like many other authorities facing financial difficulties largely out of their control, has been forced to introduce saving plans, measures and cuts.

These have involved reshaping adult social care with the controversial sale and closure of its care homes alongside new plans to support more dementia patients and to help more people to stay at home amidst claims that there has been a decline in demand for residential care.

The council has also introduced cost-saving changes to waste facilities and is considering the proposed closure of its Glossop household waste recycling centre.

It has also been considering the sale of property assets as well as working on a potential scheme to redevelop its multi-million pound County Hall headquarters, in Matlock, with a development partner after proposals for its future use have included converting it into a hotel, homes, offices and a base for the authority.

Cllr Lawson added: “In our end-of-year financial report released in July we revealed the significant overspends in Children’s Services and Adult Social Care which obviously provide a multitude of vital statutory services.

“However, prudent planning and close monitoring of every pound spent ensured we could mitigate these overspends with underspends in other areas and balance our books.

“We were able to report the good news of a £2.009m net underspend for 2025-26, which was an improvement on the forecast position earlier in the year of a £0.5m overspend, and this was achieved due to a combination of factors including all departments ensuring tight controls on spending to stay within their budgets where possible, holding vacancies open and additional income received by some services has also contributed, as well as further savings being realised in the council’s corporate budgets. 

“Although that was good news there is no complacency and we continue to manage the pressures on our budget, despite real terms Central Government funding reductions and the prospect of minimal grant increases over the coming years that add additional strain.”

The BBC study says 95 per cent of upper-tier councils – like Derbyshire County Council – have all approved savings as they try to balance their budgets.

It has compiled statistics with Birmingham City Council due to make the most savings overall in 2026-27 – a total of £96m – from 146 councils out of 148 in England in the study who approved savings in their budgets. These combined savings for England amount to £2.86bn, according to the study.

Derbyshire County Council is listed in the study as being due to make an estimated £55.3m in planned savings in 2026-27 – although the council says this is expected to be closer to £57m – and it is in eighth place in the study out of all the councils due to make the most planned savings in England.

Out of the top 11 councils with savings planned for 2026-27, the range runs from Birmingham City Council in first place with the most savings planned with £96m for 2026-27 to Leeds City Council in eleventh place with the least savings planned at £46.6m for 2026-27.

The BBC study also identified Derbyshire County Council’s estimated and predicted shortfall Budget Gap for 2027-28 – the difference between what a council expects to spend and the funding it expects to receive – as £1.58m.

Four fifths of English councils in the study predict they will need to fill a financial black hole by the end of the 2027-28 financial year, despite making savings this year and their combined predicted budget gap shortfall by the end of the 2027-28 financial year is £2.96bn.

Hampshire County Council was recorded in the study’s analysis of English councils with the largest overall predicted budget gap by the end of 2027-28 at £179.7m with Norfolk County Council in tenth place with a predicted £67.211m budget gap.

Concerning Derbyshire County Council’s finances, Cllr Lawson, said: “The council achieved the majority of its savings plan in 2025-26, with £35m being saved against a target of £37m, with services across the council reducing spending to compensate for the shortfall. And by the end of this financial year those savings will be closer to £57m.

“This is alongside our transformational programmes which are improving efficiency and reducing the overall cost of running the council.   

“We have now completed a procurement process to move this programme on a stage, with the end result being possible savings of between £19.2m and £38.7m up to and beyond 2028.  This will ensure we are on a much stronger footing and well-positioned at the outset of Local Government Reorganisation.” 

Saving measures adopted by some councils, according to the study, include slashing bus routes, cutting support for children and young people and closing heritage attractions while also ramping up charges for garden waste, parking and leisure activities.

However, as in previous years, the study claims that the majority of cuts will come from adult social care – with many councils seeking to procure cheaper contracts with care providers and by reviewing the needs of people already receiving care or with the closure of care homes.

In England, four in five councils also increased council tax by 4.99per cent, according to the study, and the annual bill for a Band D property rose by close to £90.

The BBC study also recorded Derbyshire County Council’s Net Revenue Budget for 2026-27 at £820.10m and also noted that it had increased its council tax precept by 4.90per cent for the 2026-27 financial year.

As many as 35 struggling English councils will receive a combined £1.5bn of Exceptional Financial Support in 2026-27 to allow them to sell property or take out short-term loans to fund day-to-day spending but Derbyshire County Council is not among them.

The study states that findings show that, despite recent funding reforms, Local Government services are continuing on a path of decline which many commentators trace back to the near halving of council funding throughout the 2010s.

Although grant funding from the Government has been increasing in cash terms since the pandemic, the spending power available to authorities is still about 16per cent below 2010-11, according to the Institute for Government.

At the same time, spending on adult social care and children’s services has risen steadily, taking up a growing share of local authority budgets.

The result has been sustained pressure on other services, including libraries, leisure facilities, road maintenance, planning and youth services, many of which have seen substantial cuts over the past decade.

Since 2026, councils in England now receive multi-year financial funding settlements instead of one-year settlements from the Government which means they can better plan ahead for the future.

The Government has also introduced Fair Funding Review 2.0, the first full reassessment of councils’ relative spending needs since 2013, and this provides a new formula allocating funding using updated measures of need, deprivation and service pressures, while also taking account of councils’ ability to raise money locally through council tax and business rates.

Some councils are considering artificial intelligence to slash costs and reduce staff with a range of measures being introduced this financial year from automating helplines to drafting care plans.

But Derbyshire County Council’s main focus has been on ‘prudent planning and close monitoring’ of spending, ‘ensuring tight controls on spending to stay within their budgets’, and ‘transformational programmes’ to improve efficiency and reduce running costs.

Jonathan Carr West, Chief Executive of the Local Government Information Unit, said: “It’s sad to say these results are not hugely shocking in that they paint a picture of a sector that is perilously close to financial collapse.

“That was the case last year and the year before that. I think we see some of the changes the Labour government have made since 2024 have sort of slowed the rate of decline in Local Government finance.

“If we’re all marching towards a cliff edge, they’ve sort of slightly slowed down that progress, but they haven’t fundamentally changed its direction.”

He added: “We have made some adjustments to how the pie is cut up within Local Government, but we haven’t really grown the overall quantum of resource sufficiently.

“We still see Local Government struggling to keep up with astronomic rates of increase in demand and cost for those key statutory services, adult social care, children’s services.

“Those two services alone account for nearly 80per cent of the budget of most big councils. And in those areas, we see continuing cost increases, continuing demand rises, and so the sector as a whole continues to become more and more on the brink of collapse.”

Councils are also preparing for Local Government Reorganisation with plans for the introduction of larger unitary councils between 2027 and 2028 so Derbyshire County Council and the county’s eight borough and district councils and Derby City Council will be replaced with two unitary councils – a Derbyshire North Council and a Derbyshire South Council.

A Ministry of Housing, Communities and Local Government spokesperson said: “We’re making £78bn available to local authorities across the country this year through our fair funding settlement – and thanks to our changes nine in ten councils in England will receive funding that matches their relative need by the end of 2028-29.”

The Labour Government stated that by 2028-29 it will have made available a 24.3per cent increase in Core Spending Power, worth £16.6bn since coming into power in 2024-25.

It added that the Schools White Paper, backed by £4bn of investment over three years, sets out the Government’s plans to make every school inclusive and transform outcomes for children with SEND.

In response to concerns over SEND deficits, the Government says it will resolve 90per cent of local authorities’ Dedicated School Grant High Needs deficits accrued to the end of 2025-26 projected to be worth £5bn subject to councils securing the Department for Education’s SEND reform plan.

The Government added that the new multi-year Local Government Finance Settlement allows for over £4.6bn additional funding available for adult social care in 2028-29 compared to 2025-26, including £500m for the first-ever Fair Payment Agreement.

It also stated that it is driving the biggest transformation of children’s social care in a generation with the Families First Partnership programme – backed by nearly £3bn investment over four years, including a historic £2.4bn over this multi-year Settlement.

The BBC study was based on full responses from 183 councils and from publicly available information relating to a further 29 authorities looking specifically at budgets set in February and March.

It was not able to verify figures for five English authorities and one Scottish authority including Harrow, Nottinghamshire, Tower Hamlets, Wokingham, Scottish Borders and Shropshire.