Derby City Council will take the next step towards putting its finances on a firm footing when two reports go to Cabinet next week.

Budget proposals for 2025/26 have been refreshed since they went to public consultation, with money being put back into services and more going back into reserves. This is due to an additional £8.6 million of resources, over and above that which was assumed at the time of the budget report being issued for consultation following the Government’s finance settlement.

The Medium Term Financial Plan (MTFP), which will go to Cabinet on Wednesday 12 February, also sets out a plan to replenish the Council’s reserves over the next three years to bring them back to a healthy and sustainable level.

Nationally, the local government financial settlement put more money into social care, introduced a new recovery grant which favoured areas like Derby with high deprivation and a low Council Tax base, and gave a boost to areas in need of investment such as support for children with Special Educational Needs and Disabilities (SEND). The new Government has also said it’s committed to multi-year funding settlements but has not yet confirmed when this will happen.

For Derby City Council, this has meant an increase in core spending power by £22.6 million, which is an above average increase for the local government sector, along with continued investment into social care, a new prevention grant of £2 million to support children’s social care reform, and the recovery grant which resulted in £6.7 million for the city. 
 
Some of the new things that have been added to the budget proposals as a result include:

  • Additional provision for areas where demand continues to grow, such as homelessness
  • Investment into SEND services, including two SEND officers
  • £250,000 for Cultural Recovery, to support partners in the cultural industries facing significant financial challenges
  • And additional £200,000 for the Council Tax hardship fund, to support households experiencing financial hardship
  • An extra £100,000 to support the Market Hall in its first year of re-opening
  • A neighbourhood manager, covering the city centre, to co-ordinate safety, vibrancy & partnership work.
  • Investment into waste minimisation  
  • Additional capital investment for a new depot at Stores Road.

Councillor Kathy Kozlowski, Cabinet Member for Governance and Finance, said:

“After years of lobbying, the new Government is listening to councils and promising much-needed reform. We welcome the additional funding, which help us get on a stable footing for the future so we can continue to provide the services that our citizens need and want.

“While it is assumed in our funding settlement that Council Tax will increase in line with previous years, which is 4.99%, we’re committed to investing into services that matter the most to our residents, protecting the most vulnerable and putting the Council on the way to financial sustainability.

“We’re listening to the public about what they want in their city, and our proposed budget for 2025/2026 will prioritise tidier streets and green spaces, help our city centre feel safer and become more vibrant, and support children and adults who need our care.”  

An update on the Council’s position at the end of Quarter 3 also goes to Cabinet on 12 February.

The pressure on the revenue budget is now at £6.37 million, a fall of £2.59 million since halfway through the financial year. Mitigation continues to reduce this figure even more by the end of March, to limit the use of reserves as much as possible.

All the savings identified for 2024/25 financial year are expected to be achieved by the end of financial year, leaving £117,000 of unachieved savings from the previous year to be carried over to next year. 

Pressures remain in some services, such as homelessness, due to continued demand. People’s services, the Council department which looks after social care for adults and children, has a forecast overspend of £5.31m by the end of the year. However this is partly offset by an underspend by an underspend of £3.41 million in children’s services, which is due to the success of strategies developed in recent years to manage demand starting to see results.