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Progress welcomed but our budget challenges remain

Published: 15 November 2023

We have made progress to tackle our forecast in-year overspend of £46.4 million but serious challenges still lie ahead.

Our latest financial position for this financial year is set out in our quarter 2 budget monitoring report which details that half-way through the year the forecast overspend is reducing.

The previous report released in September showed that we had a forecast overspend for the current year of £46.4 million, due to external forces beyond our control.

These include higher than anticipated inflation impacting all areas of expenditure, higher fuel, energy and materials costs, and a continuing increase in demand for services, particularly in adults’ and children’s social care.

The 2023/24 pay award for staff, which is agreed at a national level but met at a local level, has added to the significant financial pressure on the authority.

The latest report due to be considered by our Cabinet on Thursday 23 November 2023 reveals that September’s forecast overspend has now been reduced to £33 million following a number of actions taken immediately, including introducing strict cost-control measures across the council.

The cost-control measures, which remain in place, include:

  • freezing recruitment except for essential jobs, and reducing the use of agency staff
  • reducing overtime
  • no non-essential conferences, travel or training
  • reducing print, IT equipment and stationery spending
  • only carrying out health and safety repairs on properties
  • where expenditure is non-essential, ceasing or delaying procurement for supplies and services and postponing projects still in the planning stage

The forecast overspend has also been reduced by departmental savings, the use of reserves and the receipt of additional grant funding.

Councils across the country are experiencing the same or similar financial issues to the ones being faced in Derbyshire, with some in even more severe positions.

Council leader Councillor Barry Lewis said:

“We have always been a well-managed, efficient and financially stable council which has balanced our books, maintained a robust level of reserves and been able to support vital, high quality, value-for-money services for our residents across Derbyshire.

“However, the reality is that the financial pressures we are facing, along with other councils and households, are now greater than ever experienced before, with most of these pressures being simply outside our control.

“We took immediate action in September to try to avoid more serious future consequences and due to the hard work of staff across the council steady progress is being made which is to be welcomed.

“However, these huge savings cannot all be found overnight and the structured, carefully planned and measured approach we are taking is the prudent course of action and will ensure longer-term sustainability and protect vital services.

“Although we are still in a challenging position this is not a bankruptcy situation, and we will continue to do all we can in the second part of the financial year to ensure we get back on track and reduce the overspend further.”

County Council deputy leader and Cabinet Member for Corporate Services and Budget Councillor Simon Spencer said:

“Over the past 13 years we have made £300 million of budget savings, and it becomes much harder to find savings from already very lean and efficient services, but we are working hard across the council to tackle the forecast overspend and clear progress is being made.

“This work is running alongside the planning for next year’s budget which is well underway. There is no doubt these challenges will continue well into 2024-25 and we are currently running our Your Council Your Voice consultation where Derbyshire residents can give their views about our services and budget.

“We will continue to do all we can in these challenging times and are continuing to lobby the government for extra funding so that we can continue to run vital services to those who need them most, but we also recognise that even more difficult decisions will need to be made in the months ahead to try to balance the books in future.”

Take part in the Your Council Your Voice consultation.