Derbyshire County Council has set a balanced budget with councillors agreeing how the authority will manage its finances for the year ahead.
At a meeting of Full Council held on Wednesday 14th February, the authority set its net budget for 2024-25 at £714.8m and agreed to a council tax rise of 4.99%.
The Revenue Budget Report 2024-25 sets out the council’s current financial position and includes the impact of external factors beyond its control which are putting finances under huge pressure, including higher than expected inflation, rising fuel and energy costs, a continuing increase in demand for services, especially adult social care and children’s services, and an employee pay award agreed nationally but funded locally.
There is currently an in-year (2023-24) overspend which is forecast to be £34.1m by the end of the financial year, partially offset by tight cost controls on non-essential spend implemented by the council from autumn 2023, and to be mitigated with funds released from earmarked reserves.
There is also a predicted funding gap of around £40m for 2024-25.
The Revenue Budget Report contains a number of budget savings proposals to support a balanced budget for the term of the council’s Five-Year Financial Plan up to 2028-29. The total savings made by implementing the proposals would amount to approximately £66.6m by 2028-29.
The meeting of Full Council heard that while the council has set a balanced budget for 2024-25, the financial position remains challenging and that difficult decisions must be made in the months ahead.
Final decisions have yet to be made on all the budget savings proposals, many of which would see some council services changing, reducing or stopping if agreed.
Some proposals will need to be considered separately at future Cabinet meetings and be subject to full public consultation or engagement where appropriate, giving residents the chance to have their say before final decisions are made.
The Revenue Budget Report states that in order to continue to maintain a balanced budget in the medium term, if the savings proposals detailed do not go forward, savings will need to be found from other service areas.
Council Leader Councillor Barry Lewis and Deputy Leader Councillor Simon Spencer reassured residents that all efforts were being made to protect vital services, especially around social care for adults and children.
They both previously welcomed extra social care funding announced by the government earlier this month, which amounts to an extra £7.6m for Derbyshire in 2024-25.
However, they added that the extra funding was not enough to cover spiralling costs and rising demand, and they had been left with no choice but to push forward with the budget savings proposals and to increase council tax to the maximum allowed by government.
Councillor Lewis said: “We have always been a well-run, stable and efficient council which has worked hard to balance our books while continuing to provide high quality, vital services to residents who need them.
“It is down to this continuing strong and efficient financial management that we have been able to set a balanced budget for the year ahead, although we know that tough decisions lie ahead.
“The challenges we continue to face are far greater than experienced before and are down to external factors simply outside our control.
“We believe the budget and council tax we have agreed will help us to protect vital services for older and vulnerable people and children which is a priority, but we acknowledge the rise in council tax will not be welcomed by residents with already stretched household budgets.
“We will continue to lobby government for extra funding following success on this in recent weeks and will continue with our call for the significant costs of placements for children in care to be addressed.”
Deputy Leader and Cabinet Member for Corporate Services and Budget Councillor Simon Spencer said: “A lot of hard work has gone into setting a balanced budget for the year ahead but the challenges are far from over as we must make some very tough decisions in the coming months.
“We have received extra money for social care but continue to lobby government for extra funding and for a multi-year settlement which would be very welcome and allow us to better plan for future years.
“Doing our best for Derbyshire residents is at the heart of what we do and while the financial pressures are immense we will continue to work hard to protect the services so many people rely on.”