Chesterfield council leader expresses ‘pride’ over budget despite cutbacks - with more feared

The Labour-controlled council’s Leader, Cllr Tricia Gilby, was criticised by opposition Liberal Democrat Group Leader, Cllr Paul Holmes, as the council voted during a Full Council meeting, on February 26, to approve its recommended 2025-26 Budget and Medium-Term Financial Plan and its Housing Revenue Account Budget for 2025-26 to 2029-30.

But Council Leader Tricia Gilby said ‘pride’ is a word she is ‘very proud’ to use in reference to the borough of Chesterfield after difficult decisions have had to be made and implemented in the face of a challenging financial year for the council with inflationary costs and increasing demands on services.

Cllr Gilby told the meeting: “Pride is a word I am actually very proud to use in reference to the borough of Chesterfield and the activities of this Labour-led council.”

She added: “I am very proud and I am proud we have made some tough decisions and implemented them in a lot of places.”

Following a tough 2024-25 financial year which saw the council introduce controversial saving plans and changes with money also taken from the Budget Risk Reserve to balance a forecast £4m budget deficit, it achieved its saving targets and hopes to deliver an underspend to support the 2025-26 budget despite inflationary costs.

But Cllr Holmes said: “I think I heard that she was proud of the way the council dealt with the budget and savings and I am not sure it is the word I would use. The council has faced its worst financial crisis in its history.”

Cllr Holmes referred to the estimated multi-million pound deficit faced by the council in the current 2024-25 financial year and the subsequent implementation of numerous saving plans including the closure of the Visitor Information Centre, the temporary closure of heritage site Revolution House, the sale of Tapton House and increased parking fees.

He also claims that a balanced budget for 2025-26 will depend on ‘another £1m of cuts’ while facing a possible forecast deficit gap of over £2m in 2025-26 and a further forecast multi-million pound deficit gap by 2027-28 with the prospect of big payouts to support a possible transformation under the Government’s Local Government Reorganisation plans to introduce a single unitary council for Derbyshire.

The council has acknowledged that the current MTFP does show a more challenging outlook from 2025-26 onwards with forecast gaps of £2.2m in 2025-26 rising to 4.2m by 2027-28 with a changing national fiscal and economic situation with a number of risks and spending pressures expected to reach beyond the current financial year and additional financial challenges will need to be considered.

Cllr Gilby told the meeting 2024-25 has been a ‘challenging financial year’ with ‘huge pressure’ from inflationary costs and increased costs for service delivery.

The council has also stated that like all local authorities it continues to face significant financial challenges after a sustained period of austerity since 2010 with ongoing risks over future funding arrangements, the budgetary impacts of the Covid-19 pandemic, the cost-of-living crisis and a sustained period of exceptionally high inflation and increasing pay awards.

But despite what Cllr Gilby called a ‘challenging national fiscal and economic context’ she was pleased to report the council has continued to deliver quality services for residents and businesses to make Chesterfield a ‘thriving borough’.

Cllr Gilby added: “We have also worked diligently to achieve a managed in-year underspend by deliberate actions. We have reduced expenditure without detriment to service and our budget strategy is working.”

She explained that the 2024-25 revenue budget assumes the delivery of £3.1m of new savings that were approved as part of the budget setting process for that financial year and there are currently £2.54m of savings that have either been delivered or are on track to be delivered.

However, she acknowledged that there are £163,000 of savings that are at risk of not being delivered in 2024-25 and these have been recognised as financial pressures.

Both Cllr Gilby and the council stated that ongoing savings are being achieved by increased income from charging for garden waste, the review of its leisure centre and cultural service operating models, its property vacancy rate savings, and a revised fees and charges policy.

Deputy Leader, Cllr Amanda Serjeant, who is also the Cabinet Member for Finance and Asset Management, said: “One of the reasons we are in a better financial position is that this council made some tough decisions last year.”

She added: “This council pledged to make difficult decisions not because it wanted to but in order to do the best for the people of Chesterfield.”

The council revealed the final Local Government Funding Settlement published in February confirmed Chesterfield’s Core Spending Power with an annual increase of 2.8per cent, however, the council says the increase for Chesterfield is mainly due to the inclusion of the contribution of £200,000 towards the cost of an increase in employers’ national insurance contributions.

Cllr Gilby told the meeting the council only received a one-year funding settlement from the Labour Government because she claims it is having to deal with the aftermath of the previous Government but she added the current administration has been consulting on reforms for future multi-year settlements which will improve financial planning for authorities.

The council stressed that the impact of pay awards, increased employers’ National Insurance contributions, utility costs, inflation and interest rates will all have to be considered.

Budget assumptions have been reviewed and updated, according to the council, to take account of known changes, new and emerging service pressures and inflationary impacts.

The council’s report says it is considered that around £730,000 of the underspend in 2024-25 can be used as a one-off contribution towards the 2025-26 budget gap.

Other areas of underspending have been driven by better-than-expected outcomes from budget savings delivered in previous financial years which have led to sustained efficiencies, cost reductions and increased income projections, according to the council.

The council acknowledged that while the use of reserves has so far been deemed affordable and that they are adequate up to March 2026, they are now at a level whereby any significant further use would leave the council exposed to risk and unable to manage potential risks.

Cllr Gilby said she was pleased that despite ‘the scale and number of our financial challenges’ the council has been able to produce a balanced budget for 2025-26 and to remain financially sustainable it will be necessary to raise money from a council tax increase.

The council voted on an agreed council tax increase of 2.99per cent for 2025-26 so a Band D Council Tax bill would increase by £5.70 from £190.81 to £196.51 in 2025-26.

This would mean for a Band A property – which includes more than half the properties in the borough – the increase would be equivalent to an extra £3.80 per year or 7p per week.

And for a Band D property, the increase would be equivalent to an extra £5.70 per year or 11p per week.

Cllr Holmes said the council does not have a lot of choice other than to increase its share of the council tax bills unless it wants to introduce bigger cuts.

Chesterfield Borough Council also says a 2.99per cent increase together with the increase in tax base will contribute an additional £100,000 per year over and above that which had been assumed in the council’s original MTFP which it aims to invest in its service provision.

The Housing Revenue Account Budget for 2025-26 to 2029-30 stated that the maximum rent increase for 2025-26 is 2.7per cent and that any reduction would have a negative impact on the 2025-26 budget and MTFP which could lead to a reduction in the available resources to invest in tenants’ homes.

Chesterfield Borough Council voted and approved the noted forecast outturn for 2024-25, the overall revenue budget for 2025-26, the use of £1m from the Business Rates Risk Reserve, the creation of a Service Efficiency and Improvement Reserve, the increase in the council’s share of council tax with an unchanged Local Council Tax Support Scheme while noting the financial projections in the MTFP for 2026-27 to 2027-28.

It also voted in favour of noting the forecast outturn for the Housing Revenue Account for the current 2024-25 financial year and approving the draft estimates for the Housing Revenue Account for 2025-26 and future financial years.

Savings and cutbacks during the council’s 2024-25 budget also included changes at the Winding Wheel Theatre, increased car parking fees, new operational arrangements at community hubs and sports centre operations and with its outdoor sports and leisure activities along with increased fees and charges.

The annual Stand Road Park fireworks display was cancelled and the East Midlands in Bloom competition is no longer being run by the council.

It also addressed a number of other areas including how council community buildings are used, funding levels for external organisations, how it manages council venues, the use of digital technology, its events programme, and the management and maintenance of parks and open spaces.

Chesterfield Borough Council has also been able to reduce its workforce costs with some full-time employees agreeing to voluntary redundancy or voluntary retirement to help avoid compulsory redundancies.