Erewash Borough Council will have to raise Council Tax by 2.99 per cent this year while continuing to find huge savings if the town hall is to stand any chance of heading off a looming financial crisis, a stark new report reveals.
The detailed analysis of how the authority has been impacted like others across the country by the government’s funding squeeze comes from its Director of Resources.
Faced with a mammoth financial challenge, the Council's Executive has prepared a draft budget to tackle the dilemma head-on – while giving local people an opportunity to comment on proposals for making savings and generating extra income.
Leader James Dawson and fellow members of the executive are poised to give the immediate go-ahead to the consultation when they meet on Tuesday (16 January).
The canvass of residents will last for three weeks until early February as the council seeks input from locals on what else the authority might look at to remain in the black after this year.
However, some positive news in the report suggests that, by taking prudent steps, the authority WILL be able to balance its budget for 2024/25, but adds that major action is required to avoid plunging into the red next year and beyond. This is after almost a decade of the borough being stating that it has been short-changed in terms of funding.
The report reveals how since 2015 the sum that district councils get to spend per dwelling has risen to £279 an average.
In Erewash the figure has only gone up to £236. By comparison, Oxford gets £400.
Based on the average figure, Erewash has been losing out on £2.3m every year.
Despite this the council has succeeded in remaining debt free – and has only now had to look at moves such as bringing in charges for garden waste collections.
Key takeaways from the report are:
- The 12p rise per week for a typical Band D property will take Council Tax for the year to £213.83.
- Council reserves will not need to be dipped into – for the first time in many years. This means the “rainy day” fund can be kept at a minimum of around £2million – which is the level recommended by the Director of Resources.
- Total available resources in 2024/25 will amount to £13.645m, including government funding. This represents a 6% increase of £0.787m.
- The rise has been severely outpaced by soaring inflation and other increasing drains on council resources. It is described as “no way near enough to accommodate the pressures including expected additional demand for homelessness and supported accommodation which has resulted in a 19% increase on the base budget”.
- Without further action, budget shortfalls are forecast to be £0.691m in 2025/26 and £2.557m in 2026/27.
Looking ahead to future government funding settlements, the report warns of likely “real terms cuts for unprotected services, including most of local government.” This is where residents are being asked about their priorities.
The report stresses: “The council is committed to being financially sustainable. This means ensuring it can live ‘within its means’, only spending the funding it receives and balancing the budget in any given year without using General Fund reserves. This is our number one priority.”
The consultation with local people ahead of the budget going to full council in March will see residents urged to complete a questionnaire on the Erewash Borough Council website.
Lead Member for Resources, Councillor Gordon Thomas said: "Our financial position is nowhere as parlous as many other councils – even though it is clear we have long been getting a raw deal.
“In terms of core spending power even among councils in Derbyshire, ours has seen the most pitiful increase – up 2.5 per cent since 2015. In that same time South Derbyshire District Council’s rose 22 per cent, while Amber Valley’s went up by eight per cent.
“We can assure residents that there will certainly be no let-up in us lobbying the government to give us a fairer shake. Meanwhile we want local people to tell us their priorities as we seek to stay in the black. This is the reason for the consultation – and we urge residents to seize the opportunity to let us know their views.”