Derbyshire County Council refutes u-turn claims over plan for three-year council tax rise

Pictured Is Derbyshire County Cllr Stephen Reed, Taken By BBC LDR Jon Cooper

By Jon Cooper – Local Democracy Reporting Service

A Derbyshire County Councillor says no final decision has yet been made on plans for the authority to increase its council tax precept to 4.99 per cent for the next financial year and onwards until 2030 as part of efforts to set a balanced budget and to keep services well-funded.

Cllr Stephen Reed, Cabinet Member of Business Services, has responded to a budget report due to be considered at a Cabinet meeting on January 9th that the authority is assuming an on-going 4.99 per cent increase to council tax as part of the Mid Term Financial Plan between the three financial years of 2026-27 to 2030-31.

The cash-strapped council is considering both setting its council tax rate at its maximum for the next three years and plans to introduce significant ‘new savings plans’ with potential cutbacks expected across a number of areas to save millions of pounds to meet a forecast £37.8 million shortfall and to balance its budget for the 2026-27 financial year.

Cllr Reed said: “No decision has been made. This is a budget report for presumed savings and it’s always done at the maximum which is what I have tried to be clear on.

“We have got to balance the budget and we are still looking at the financial settlement and the Fair Funding Review and all of these things based together and we should get the full clear picture before Cabinet.

“We are doing a review and if we go for the maximum we can reverse down and this is the starting point.”

The council is calculating what the Government’s financial funding settlement for the authority, which is yet to be finalised, means for 2026-27 to 2028-29 and it is considering a new Fair Funding Review change which consolidates a large number of grants into core funding and seeks to rebase a council’s overall funding level against an assessment of its need for funding.

Cllr Reed added that the council has not yet set the council tax and the figure in the report is an assumption and this will be further considered at both January 9th and January 29th Cabinet meetings and it is looking at all options because of the financial pressures faced by the council.

The council claims it is facing ‘economic uncertainty’ and ‘significant cost and demand pressures’ after a period of high inflation and the cost-of-living crisis with continuing increased demand for council services particularly in respect of social care with Children’s Social Care and to a lesser extent in Adult Social Care after the agreed closure and planned sale of nine care homes.

Total spending for the council for the next year stands at £838m including reserves with a highlighted budget shortfall of more than £37m with plans for £22.4 million in savings in the 2026-27 financial year alongside plans to raise a substantial sum from council tax.

The council stated that the Quarter Two revenue monitoring forecast year-end position for 2025-26 is that there will be an overspend of £26.105m for Children’s Social Care while Adult Social Care is also forecasting a net overspend of £4.887m but the forecast overspend is to be largely offset, according to the council, by a forecast underspend of £26.553m against the Corporate Budgets.

Budget proposals approved for 2025-26 already included significant savings requirements across all departments with the funding of only essential or unavoidable service pressures and a limited use of reserves and an increase in council tax, and Derbyshire County Council has argued it is facing factors beyond its control including pay and price inflation and rising demand and costs for services, particularly in adult and children’s social care.

It has a predicted shortfall in its budget for the 2026-27 financial year of £37.8m which has led to the latest proposed savings measures or planned cuts being put forward.

The council’s new proposals aim to deliver £22.4m of savings in 2026-27 to support meeting the forecast budget funding shortfall and it says the remaining shortfall will be made up from £2.5m of savings with changes to the way the council operates and with £12.9m to be saved from corporate budgets.

The new savings proposals follow a significant savings plan which has been running since 2024 to 2025, according to the council, which has so far delivered £70m of savings over the past two years, according to the council.

The council’s latest ‘savings plans’ could see a review of fee rates for home care, the closure of Glossop household waste recycling centre, changes to the community support beds system in care homes to reduce costs, more technology to support adult social care, and a service redesign with a ‘transformation’ department and the removal of long-term vacancies across corporate services.

It also says it is developing a plan for the ‘transformation’ of its operating model to ensure it works as effectively and efficiently as it can and it added that it is considering available opportunities to reduce costs through rationalisation and improvement.

This programme of change aims to save at least £19.2m and potentially up to £38.7m over a two-year period right up to the expected changes under Local Government Reorganisation, according to the council.

But the council’s latest report, entitled Budget Savings Proposals 2026-27 to 2030-31 and Update to Medium Term Financial Plan, states that the future modelling contained within the MTFP assumes an ongoing 4.99per cent increase to council tax.

It outlines that the authority will need to find an additional £66m in budget savings by the 2030-31 financial year.

The report stated: “It should be noted that the MTFP shows that, on current projections further savings will be required to be found over the course of the three-year financial settlement to ensure the budget is balanced.”

Cllr Reed accused the former Conservative administration of drawing on the council’s reserve funds every time it had a budget shortfall but he argued the current Reform administration subsequently does not have that luxury saying ‘the cupboard is empty’.

He also refutes claims that the new Reform UK administration had previously pledged to cut council tax levels and that it is now doing a u-turn due to a significant loss in funding and financial insecurity.

Cllr Reed said: “We never promised to cut council taxes. At no point have we ever made a promise to cut council taxes. What we did promise was to cut wasteful spending and cut taxes nationally.”

He argued the council is having to consider the Government’s funding settlement and Fair Funding Review in the context of the financial pressures caused by the growing demands for children’s social care and adult social care.

Cllr Reed claims the Labour Government has told the council it needs to raise its council tax rate to 4.99 per cent and the Government’s decision to increase employer national insurance contributions alongside an increase to the minimum wage is also ‘eating into the budget’ and ‘hurting all councils’.

He said: “We have to make sure things are well funded and supported to provide the best services for residents.”

Cllr Reed also claims that in real terms a 4.99 per cent council tax increase on a Band D property means £81.29 and a half-pence per year so each one per cent increase equals as £16.29 per year on a Band D property or £1.35 per month.

The Labour Government has announced a £160.6million Local Government funding settlement from Central Government under a new system giving the county council money to spend on Special Educational Needs and Disabilities, keeping care homes open, fixing roads and potholes, installing grit bins, reviving high streets and protecting libraries.

But Council Leader, Cllr Alan Graves, claims this is a ‘redistribution exercise, not a growth plan’ with money being moved away from rural counties like Derbyshire and redistributed to large cities and urban authority tiers while the county council continues to face a rising demand for Adult Social Care with higher rural area costs and unresolved SEND pressures.

Opposition Conservative Group Leader, Cllr Alex Dale, accused the Reform administration of ’empty rhetoric’ based on previous promises to cut taxes and opposition Green Party Leader, Cllr Gez Kinsella, accused the Reform council of misleading Derbyshire residents.

Cllr Dale said: “It’s now painfully clear that Reform’s promise to ‘cut your taxes’ plastered across leaflets and campaign material right across the county in last year’s elections, was nothing more than empty rhetoric.

“Residents were sold a simple slogan, but the reality is that those promises were as worthless as the paper they were printed on.

“Reform are starting to learn a very stark lesson: running a local authority is far harder than they ever admitted during the election campaign.

“The slogans might have been easy, but the serious responsibility of balancing budgets and protecting vital services clearly wasn’t thought through.

“It is only now, after taking control that the scale and complexity of the job is beginning to dawn on them.”

Cllr Dale acknowledged that the financial environment for Local Government is extremely challenging but he says the Conservative Group lived that ‘reality’ for eight years when it was the controlling administration at the county council.

He added: “Despite those pressures, we made a clear political choice to stand on the side of hard-working taxpayers. In five out of eight years we last ran the authority, we rejected the easy option of pushing council tax up by the maximum five per cent, opting instead for more modest increases of two or three per cent.

“As a result of those difficult decisions, the average Band D household in Derbyshire is around £500 better off than they would have been if we had simply maxed out council tax every year. That proves that, despite the rhetoric, council tax levels are always a political choice.”

Cllr Dale also criticised the Reform administration’s claims about becoming efficient and slashing waste after accusing the group of spending millions of pounds on consultants and employing a new chief executive on a £200,000 annual salary while planning a council tax increase.

He added: “The people of this county deserve better than headline-grabbing promises that collapse the moment the real work begins.

“They deserve responsible leadership, honest choices, and a council that respects how hard families are already being squeezed.”

But Cllr Reed said the Reform administration has never been afraid of paying people what they are worth and that a percentage of the council’s new chief executive’s salary will be performance-related for a difficult and uncertain role as the authority heads towards Local Government Reorganisation.

He added that the Conservatives ignored staff calls for pay rises during its last three years in power and they did not review the pay scale and they too had paid for consultants particularly to address SEND difficulties.

Opposition Green Party Group Leader, Cllr Kinsella, said: “At the last election Reform’s leaflets said they would ‘cut your taxes’ and criticised others who ‘keep raising your council tax’. Yet here we are, the maximum increase in council tax until 2030.

“They have basically misled the people of Derbyshire. The rhetoric was all about cutting waste with DOGE reviews. Instead, we are being charged more for less.

“What a mess they have made of the sale of eight care homes. Unable to sell them, they are now having to close, with the loss of people’s homes and lost income. Same with adult education centres, more closures and most recently, they announce a proposal to close the recycling centre at Glossop.

“Finally, they are wasting millions on consultants, instead of paying staff the right wage for the job. The result? An inability to recruit, with millions wasted on temporary agency staff.

“Yes, the reality of running a council is tough, but they have hoodwinked the people into believing they’d cut council tax and find efficiencies. Despite their claims, this millionaire backed party is no different. People won’t be fooled again.”

Opposition Labour Group Leader, Cllr Anne Clarke, said: “The only pledge Reform made in Derbyshire was to cut taxes, but instead the only cuts residents are seeing are to their vital services, like care homes and local tips.

“That is despite the fact this Labour Government just announced a huge multi-year funding settlement for the county council of over £160m – a rise of 22per cent – compared to just £31.9m under the Tories.

“Our residents have every right to be questioning this tax rise. It is not what they voted for. The leader of Reform in Derbyshire needs to tell them why his party is breaking its promise to them.”

The council’s budget does not rule out job cuts but states that it will seek to avoid this where possible through other savings within departments, vacancy controls, redeployments, and ‘voluntary release’.

Opposition Liberal Democrat and Independent groups were invited to comment on the council’s plans but at the time of publication they had not yet responded.