On Thursday 21 September 2023 our Cabinet will consider a report that sets out in detail the pressures on our finances in the current financial year.
External forces affecting our budgets include higher than anticipated inflation which impacts all areas of our expenditure including fuel, energy and materials costs.
High inflation has also impacted on the demand for our services. This is particularly the case in adult social care and children’s services where we have seen continued increased demand for these vital services.
In addition, the expected 2023/24 pay award for our staff, which is agreed at a national level is a significant financial pressure for us and must be met from local council budgets.
The Cabinet report details the 2023/24 overspend is estimated to be £46.4 million and it also sets out the significant levels of reserves we have used to balance our budgets in recent years. This means our reserves have depleted significantly and there is less money available for emergencies and unexpected expenses.
Across the country, many councils are experiencing similar issues, many of which are much more severe than at Derbyshire. Derbyshire’s proposed approach is to take early action, show prudent financial management and to contain these external pressures and avoid more serious future consequences.
The report to Cabinet, if approved, states that significant actions are needed across the county council to reduce the forecast significant revenue overspend. We will cease all non-essential spend, through a range of cost controls to support a reduction in spending in the current financial year.
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’ve been taking many measures over the past few years to make sure we carefully control our costs, such as vacancy control measures, but now we need to do much more.
“We 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 be needed to be made to try to balance the books.
“This is a position that no-one who goes into public service ever wants to be in.
“But despite this intense pressure on our budget, we are ambitious for Derbyshire, committed to supporting people through the cost-of-living rises, helping to drive our local economy, working towards a devolution deal and working with partners to get the best value in all that we do.”
Council Deputy Leader and Cabinet Member for Corporate Services and Budget, Councillor Simon Spencer said:
“We’ll be making every pound stretch as far as it can – but we’ve been doing this for many years now and there’s only so far the money can stretch.
“We have plans to deliver £14 million of savings this year and more than £300 million has been delivered over the past 13 years. It has been very challenging to deliver these savings, especially during the pandemic when it was very difficult to make our targets.
“And although we will be continuing to look at very strict vacancy controls, in some areas of the council we will still need to recruit people to deliver front line services.
“We’ll continue to work hard to identify more ways to improve efficiency and realise savings while prioritising essential services for residents and supporting the most vulnerable people – but there’s no doubt very painful decisions will lie ahead.”