Cash-strapped Derbyshire County Council fears Government's funding proposal fails to meet increasing financial pressures

Derbyshire County Council Leader Barry Lewis and the Deputy Council Leader Simon Spencer have already indicated that the Autumn Budget had done local authorities little or no favours and the latest Government announcement comes as another potential blow to them and other councils across England.

Ministers claim that the proposed Government funding settlement of £64bn for local authorities represents a 6.5per cent increase which will account for and be above inflation rises and will be dependent on councils increasing council tax but Derbyshire County Council had hoped for something closer to a ten per cent increase.

Cllr Lewis, who is also the County Councils Network spokesperson, said larger, more rural authorities like Derbyshire County Council would find the allocation ‘bitterly disappointing’ and that councils will have to raise council tax and reduce services.

And Cllr Spencer said: “We know what the problem is and we know what the fix is but we don’t have the powers to do that but be reassured that the lobbying of Government that is going on in the background is having an effect.”

Cllr Spencer added that Cllr Lewis is using his position as financial spokesperson on the CCN to get the message to people that need to hear it that this is a national issue and it’s a ‘tragic’ national issue.

The council had hoped for a Government funding increase closer to 10per cent instead of the current 6.5per cent but Cllr Spencer stressed that lobbying will continue for more Government funding and he does not mind whatever form it takes as long as it comes quickly.

The Conservative-led Derbyshire County Council which originally forecast a £46.4m budget deficit for the current 2023/24 financial year has since worked tirelessly before recently announcing this forecast overspend has now been reduced to a £33m figure following a number of actions taken by the council which is still facing enormous pressure to make further cuts.

Despite taking tough measures, alongside lobbying the Conservative Government for funding, the council was disappointed after Chancellor Jeremy Hunt announced in the Autumn Budget that he was planning a potential £19bn reduction in Government spending on public services while expecting councils to become more financially efficient by “tackling waste”.

Derbyshire County Council has already argued that many councils across the country are experiencing similar external, financial issues due to previous high inflation rates, Covid-19 and the cost-of-living crisis, and it has stopped all non-essential spending and implemented a hiring freeze, except for essential jobs, and it is facing more tough decisions and a restriction in how much council tax can be raised.

Cllr Spencer said: “We have got a detailed way of scrutinising our financial position which is why we picked it up as quickly as we did and took action as quickly as we did and I am not saying that will be the fix but I hope so.”

He added that the council will be looking closely at the situation as it works through its in-year challenges and it will be taking action immediately and hopefully the local authority will come through this predicament while dealing with on-going national pressures.

Many councils have warned they too will need to make cuts next year to cover rising costs as they struggle to cope with rising demand for services and while struggling to legally provide certain services including social care and childcare services at the mercy of profit-making private providers.

Since 2020, seven councils have declared themselves bankrupt including three in 2023 after they all failed to balance their budgets.

The provisional £64bn figure is expected to be finalised in February, 2024, and it will cover spending from April, 2024, for the next financial year for local authorities.

This will include an additional £2bn compared to 2023 with £1bn for social care which the Government says will make an extra £3.9bn available once assumed council tax rises are taken into account.

The Local Government Association, which represents local authorities, said the settlement would not be enough to help local authorities cope with ‘severe cost and demand pressures’.

The Government states that it has increased the funding available to councils, including for this year and next, but inflation and a growing demand for services such as supporting vulnerable adults and children and housing services, has left many like Derbyshire County Council facing budget shortfalls.

Cllr Spencer said: “I am disappointed that the representations we have made particularly on children’s services have not been heard as they should have been and that does not mean we won’t keep lobbying Government and we will be pushing very hard and I understand the CNN and all the lobbying organisations will be doing the same.”