Our Cabinet will consider the Revenue Budget Report 2024-25 when it meets on Thursday 1 February 2024.
The report includes multimillion-pound budget saving proposals, a recommendation to raise council tax by 4.99% and details of how we will manage and spend a proposed £714.7 million net budget for the coming year.
The report coincides with a government announcement of an extra £500 million to local authorities responsible for providing adults’ and children’s social care, following lobbying by the County Councils Network and backed by us.
The extra funding was welcomed by county council Leader Councillor Barry Lewis, but he added that it was still not enough to prevent tough decisions needing to be made over the next few months.
Councillor Lewis said:
“We welcome the additional funding for social care announced by the government, which has resulted from lobbying of government by local authorities including Derbyshire, and by the County Councils Network.
“This extra funding will help to address escalating costs across social care accrued over the last 12 months as a result in a spike in demand for services and historically high inflation, and we will be working through the detail when we get the amount finalised to decide where best to target it.
“However, we know it won’t solve the financial challenges we face and we will still need to make some tough decisions over the coming months.”
Our Budget Revenue Report sets out our 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.
These factors have led to an in-year (2023-24) overspend which is forecast to be £34.1 million by the end of the financial year, and, as identified in the report, have also contributed to a predicted funding gap of around £40 million for 2024-25.
The forecast overspend for 2023-24 has increased from the £33 million reported last November, mainly due to continuing rising demand in adults and children’s social care, which have been partially off-set by tight cost controls on non-essential spend which we implemented from autumn 2023. More details are contained in the report.
It is planned to mitigate the forecast overspend 2023-24 with funds released from earmarked reserves.
The budget savings proposals put forward in the Revenue Budget Report would save approximately £66.6 million over the course of our 5-Year Financial Plan up to 2028-29.
Our budget for next year would also be supported by a proposed 4.99% council tax rise, (the maximum rise permitted by government is 5% without triggering a local referendum).
If agreed, the council tax rise would raise an extra £19.5 million. The 4.99% total would be made up of 2% to go directly towards adult social care costs (known as the adult social care precept) and 2.99% for general council expenditure.
The rise would see a Band B household paying an extra £57.36 per year (£1.10 per week) and a Band D household paying an extra £73.75 per year (£1.42 per week).
As well as pressures facing service budgets across the council, the Revenue Budget Report details the government’s Autumn Statement 2023 and the Provisional Local Government Finance Settlement and their effect on council finances. It also includes a response (see report- appendix three) to the Provisional Local Government Finance Settlement sent to the Department for Levelling Up, Housing and Communities, which states that 'local government needs more funding than has been allocated in the provisional settlement to continue to provide vital local services and maintain the financial standing of local authorities'.
Councillor Barry Lewis said:
“We continue to be upfront about the huge pressures on our budget which are greater than ever experienced before due to factors beyond our control.
“While we have always been a financially stable and well-managed council, 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 met from local funds have all added to our hugely challenging financial position.
“To ensure we can continue to provide vital services our most vulnerable rely on, and to continue to meet our legal obligations to maintain a balanced budget, tough decisions need to be made now.
“Our lobbying of government will continue, especially focusing on the spiralling costs of private social care placements for children, which I have been very vocal about recently.
“Despite our lobbying and the government’s announcement of extra funding this week, we have had no choice but to put forward a number of budget savings proposals, many of which, if they go forward, will change, reduce or even stop some services we provide. And for the first time in many years, we are proposing the maximum allowed rise in council tax, when we have always tried to keep it as low as possible.
“No council leader wants to see a reduction in services or a rise in council tax, and we are acutely aware of the additional burden this is likely to place on many Derbyshire households, but we have been left with no alternative.”
County Council Deputy Leader and Cabinet Member for Corporate Services and Budget Councillor Simon Spencer said:
“We have to do everything we can to balance our books and ensure we continue to provide services people expect and deserve, but to do that we have no choice but to put forward these proposals which, if agreed, could help us to achieve that.
“We remain in a very challenging position, made more difficult by the fact we have made £300 million of budget savings over the past 13 years and services are running at maximum efficiency levels already.
“While we have welcomed extra funding for social care this week, it is not enough and in certain areas the pressures are immense.
“No decisions have been made and there will be ample opportunity for people to have their say through public engagement and consultation where appropriate. But the reality is if these savings and efficiency proposals do not progress, alternative savings will need to be found in order for us to balance our budget.”
At its meeting on Thursday 1 February 2024 Cabinet will make its budget recommendations which will then go to Full Council to consider when it meets on Wednesday 14 February 2024.
Many of the budget savings proposals, if it is agreed for them to go forward, will be subject to further Cabinet reports and then followed by appropriate public engagement or consultation before any final decisions are made.