Halfway through the financial year, Derby City Council is no different to local authorities across the country as it rises to the challenge of continuing budget pressures.
At the end of July the Council released figures showing a predicted overspend of £10.8 million, fuelled by a ‘perfect storm’ of rising inflation plus increases in fuel, energy and other costs. This was against a background of increasing demand for services.
Since then, the economic situation nationally has become more uncertain with no guarantee about what funding the Government will make available for Councils. This won’t be confirmed until late December, but the national autumn budget statement on Thursday 17 November may give an indication of what the public sector can expect to face this year and beyond.
Within the Council, colleagues have been working hard to identify areas where spending can be reduced during this financial year, including vacancy management, which will see more vacant staff posts not being filled, and tightening our spending controls.
While £9.8 million of savings have been identified so far, demand for services has continued to rise meaning the predicted overspend for this financial year has risen to £12.8 in the second quarter. This could mean that savings will need to be identified this year that equal the savings made by the Council in the last four years combined if Government does not step in to support struggling councils across the country.
The Council is working up a variety of budget proposals for 2023/2024, which could see some of its services changing significantly. These will be shared with residents as part of the public consultation in late December.
Councillor Jon Smale, Cabinet Member for Finance, Digital and Culture said:
The cost of living and the state of the economy is hitting everyone hard and councils aren’t immune. We’re rising to the challenges we’re facing but this is a tough situation. Nationally more than 90% of councils are reporting a significant and increasing budget gap, and the economic circumstances that have caused it are beyond our control.
What we can do, and are doing, is tighten our belts as much as possible and focus on protecting our most vulnerable people. There are services we have to provide by law and while we’ll continue to provide them, it’s likely they will be different in the future.
Beyond our statutory duties we remain ambitious for Derby and our citizens but how we go about this is likely to change too. We are facing some difficult decisions in the months ahead.
The Council’s latest financial position will be discussed by Cabinet members on Wednesday 16 November.