Derby City Council continues its journey to achieve greater financial stability, reporting an underspend of £4 million and at the end of the 2025/2026, with 100% of its savings target met.

A report detailing the final accounts for the 2025/2026 financial year, shows how Derby has built on the gains achieved through sensible financial management, delivering a more stable fiscal position despite continuing pressures.

The effectiveness of this approach is demonstrated through the reported underspend of just over £4 million at the end of the year, bolstered by a change in the way Government funding works through the  Fair Funding Reforms. Crucially, the Council has not needed to draw on budget risk reserve to balance the budget, instead contributing the underspend to increase reserves and strengthen financial resilience for the future.

The figures that will be reported to Cabinet next week show that at the end of 2025/2026, the general reserve fund has a balance of £15 million, supporting the Council’s plan to replenish its reserves to build greater financial stability for the future. Additionally, 100% of the savings target, has also been achieved for a second year in a row, a total of £9.861 million for 2025/2026

Councillor Hardyal Dhindsa, Cabinet Member for Finance, Governance and Digital said:

I am pleased to see that this administration’s pledge to provide responsible leadership and financial management has resulted in a £4 million underspend -a position to be very proud of.

By innovating and transforming our services, as well as enhancing scrutiny and challenging historical budgets, we have managed to mitigate the impact of increasing pressures which are faced by local authorities across the country. This is testament to the hard work of our staff who have helped us find new and creative ways of working, allowing us to continue delivering the services that matter the most to our residents.

Derby is reporting a much better position than previous years, however we must continue to be vigilant. The continued financial sustainability of the Council continues to be a priority for us, allowing us to invest more into essential services that make a noticeable difference right on residents’ doorsteps.

Positive trends have emerged in key areas such as children’s social care, which for the first time in several years is reporting an underspend. This is partially due to effective early intervention to successfully reduce the number of looked after children within the city.

The Dedicated Schools Grant is also in a more favourable position, reducing the £7.8 million predicted in year-deficit reported at the end of Quarter 3 down to £7.085 million.

The Council’s position is also being strengthened by the Government’s pledge to cover up to 90% of the historic SEND deficits accrued by Councils, representing around £21 million in Derby.

Elements of the Council’s ambitious capital programme have been rephrased into future financial years to align with improved project timelines, ensuring that there is no reduction in the scope of projects.

The Council’s final year end position for 2025/26 will be presented to Cabinet on Wednesday 10 June. The meeting will be available to watch on the Council’s YouTube channel.