Our Cabinet will consider the Revenue Budget Report 2025-26 when it meets on Thursday 30 January 2025. The report can be found on the Cabinet meeting agenda, item 7.
The report includes a set of budget savings proposals for 2025-26 totalling £18.6 million, a recommendation to raise council tax by 4.99% and details of how we will manage and spend a proposed £769.7 million net budget for the coming year.
The Revenue Budget Report sets out our current financial position and includes the impact of external factors beyond our control which are continuing to put finances under huge pressure, including pay and price inflation and a continuing increase in cost and demand for services, especially children’s services and adult social care.
The report and accompanying appendices also detail our reserves position which is at an adequate level and our 5-Year Financial Plan which includes savings that need to be achieved by 2029-2030.
Our position in the current financial year (2024-25) is contained in the report, showing a forecast overspend of £25.9 million. This figure has reduced from the figure of £28.3 million reported in the previous financial quarter mainly due to an increase in the level of underspend on corporate budgets.
A savings plan put in place at the beginning of 2024 with a target of £31.3 million is now 100% on track to meet its target by 31 March 2025 and will continue to deliver more than £18 million of further savings into 2025-26.
The financial situation for 2025-26 remains challenging, and the report states that we must ensure a continued focus on the delivery of savings to maintain our financial sustainability for the year ahead and over the course of the 5-Year Financial Plan.
There is currently a funding shortfall for 2025-26 of £20.5 million and contained in the report to be considered next week is a list of budget savings proposals which would total £18.6 million if delivered, which were first considered by Cabinet earlier in January. The remaining funding shortfall of £1.9 million for 2025-26 would be met from reserves to close the gap.
Our General Reserve currently stands at £35 million and as it cannot fall below the safe level of £25 million it will be protected by available Earmarked Reserves set aside specifically for budget management. To minimise the use of reserves it is important we operate within our available resources.
Council Leader Councillor Barry Lewis said:
“We have made no secret of the fact that our budget situation remains hugely challenging and the pressures on our services, particularly around adults and children’s social care, continue to rise. The factors causing these pressures are beyond our control but we are doing everything in our power to keep the council on a financially stable footing.
“The robust savings plan agreed at the beginning of 2024 is on track to achieve 100% of its target in the current year, and we are confident that, if it is agreed, the new savings plan put forward for the year ahead will do the same.
“We are still having to make difficult decisions but are building on the hard work already put in to ensure this council stays on track financially and can continue to deliver the vital services people depend on.”
Deputy Leader Councillor Simon Spencer, who is Cabinet Member for Corporate Services and Budget, said:
“We are focussing on the most effective ways to deliver savings and identifying ways to reduce the increasing pressures on services. This includes changing the way we work overall as a council and fundamentally changing our operating model to ensure we are working as One Council, bringing some functions together as well as challenging all expenditure.
“Real savings can be found this way, and it’s interesting to note that during the budget consultation held at the end of last year 60% of respondents supported the option to combine with Derbyshire district and borough councils to form a single tier local council.
“Measures we currently have in place include vacancy management, reviewing vacant posts and freezing or deleting them where appropriate. We’re also reducing expenditure on procurement to only spend money on essential areas and reducing our spend significantly around buildings we no longer use, selling those that are surplus to requirements which saves on high running costs, and reinvesting capital receipts where funds are needed and supporting keeping our borrowing levels low.
“It’s important to remember that over the past 13 years we’ve saved £300 million and by the end of this financial year that figure will rise to £330 million, with a predicted rise to £368 million by 2026.
“That’s why we’re having to make these difficult choices, and why we’re continuing to lobby government for extra funding, not just around adult care and children’s social care but extra funding for roads maintenance too.
“We have been hearing a lot about there being extra money for fixing potholes but this year we have actually received less additional funding.”
Due to the challenging financial situation, we are proposing to increase council tax by 4.99% for the year ahead (the maximum rise permitted by government is 5% without triggering a local referendum).
If agreed, the council tax rise would raise an extra £31 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 £60.22 per year (£1.16 per week) and a Band D household paying an extra £77.43 per year (£1.49 per week).
As well as pressures facing service budgets across the council, appendices to the Revenue Budget Report include a response (see report - appendix 11) to the Provisional Local Government Finance Settlement sent to the Ministry of Housing, Communities and Local Government which highlights details of financial pressures we are currently facing.
In the letter, we state that local government needs more funding than has been allocated to continue to provide vital local services and maintain financial standing, and express disappointment that insufficient new money has been made available to help councils pay for areas such as children’s services where there has been an unprecedented increase in costs.
Following the Cabinet meeting on 30 January 2025, our budget and the budget savings proposals will be considered by Full Council when it meets on Wednesday 12 February 2025.
Many of the new 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 public consultation before any final decisions are made.