Cash-strapped Derbyshire County Council fears Government's funding proposal fails to meet increasing financial pressures

Derbyshire County Council Leader Barry Lewis and the Deputy Council Leader Simon Spencer have already indicated that the Autumn Budget had done local authorities little or no favours and the latest Government announcement comes as another potential blow to them and other councils across England.

Ministers claim that the proposed Government funding settlement of £64bn for local authorities represents a 6.5per cent increase which will account for and be above inflation rises and will be dependent on councils increasing council tax but Derbyshire County Council had hoped for something closer to a ten per cent increase.

Cllr Lewis, who is also the County Councils Network spokesperson, said larger, more rural authorities like Derbyshire County Council would find the allocation ‘bitterly disappointing’ and that councils will have to raise council tax and reduce services.

And Cllr Spencer said: “We know what the problem is and we know what the fix is but we don’t have the powers to do that but be reassured that the lobbying of Government that is going on in the background is having an effect.”

Cllr Spencer added that Cllr Lewis is using his position as financial spokesperson on the CCN to get the message to people that need to hear it that this is a national issue and it’s a ‘tragic’ national issue.

The council had hoped for a Government funding increase closer to 10per cent instead of the current 6.5per cent but Cllr Spencer stressed that lobbying will continue for more Government funding and he does not mind whatever form it takes as long as it comes quickly.

The Conservative-led Derbyshire County Council which originally forecast a £46.4m budget deficit for the current 2023/24 financial year has since worked tirelessly before recently announcing this forecast overspend has now been reduced to a £33m figure following a number of actions taken by the council which is still facing enormous pressure to make further cuts.

Despite taking tough measures, alongside lobbying the Conservative Government for funding, the council was disappointed after Chancellor Jeremy Hunt announced in the Autumn Budget that he was planning a potential £19bn reduction in Government spending on public services while expecting councils to become more financially efficient by “tackling waste”.

Derbyshire County Council has already argued that many councils across the country are experiencing similar external, financial issues due to previous high inflation rates, Covid-19 and the cost-of-living crisis, and it has stopped all non-essential spending and implemented a hiring freeze, except for essential jobs, and it is facing more tough decisions and a restriction in how much council tax can be raised.

Cllr Spencer said: “We have got a detailed way of scrutinising our financial position which is why we picked it up as quickly as we did and took action as quickly as we did and I am not saying that will be the fix but I hope so.”

He added that the council will be looking closely at the situation as it works through its in-year challenges and it will be taking action immediately and hopefully the local authority will come through this predicament while dealing with on-going national pressures.

Many councils have warned they too will need to make cuts next year to cover rising costs as they struggle to cope with rising demand for services and while struggling to legally provide certain services including social care and childcare services at the mercy of profit-making private providers.

Since 2020, seven councils have declared themselves bankrupt including three in 2023 after they all failed to balance their budgets.

The provisional £64bn figure is expected to be finalised in February, 2024, and it will cover spending from April, 2024, for the next financial year for local authorities.

This will include an additional £2bn compared to 2023 with £1bn for social care which the Government says will make an extra £3.9bn available once assumed council tax rises are taken into account.

The Local Government Association, which represents local authorities, said the settlement would not be enough to help local authorities cope with ‘severe cost and demand pressures’.

The Government states that it has increased the funding available to councils, including for this year and next, but inflation and a growing demand for services such as supporting vulnerable adults and children and housing services, has left many like Derbyshire County Council facing budget shortfalls.

Cllr Spencer said: “I am disappointed that the representations we have made particularly on children’s services have not been heard as they should have been and that does not mean we won’t keep lobbying Government and we will be pushing very hard and I understand the CNN and all the lobbying organisations will be doing the same.”

He added that the county council has a statutory duty to look after young people but it has to have the means to do so and it has to respond in the best way it can to the marketplace and it needs Government support.

County Council Leader, Cllr Lewis, has also been calling for the Government to deal with the ‘runaway’ costs of looking after children in care while dealing with profit-making private providers.

A county council report stated the budget forecast overspend on Children’s Services and Safeguarding and Education stands at £17.901m as it faces massive childcare costs.

Cllr Spencer said the county council has to look after over 1,000 children in need of specialised care and some individual placements cost as much £15,000 a week.

He added: “The market has run away with itself and the situation won’t change overnight and this is not unique to us, it’s a national issue that will take a national solution to deal with it.”

Derbyshire County Council has stated that it has had to dramatically cut its entitlement cash-figure limit from £50,000 to £23,250 for those eligible for adult care in order to sustain the service meaning those with more than £23,250 of capital will miss out on subsidised support.

The county council has also felt it necessary to increase the cost of a school meal by about 41per cent from £2.30 to £3.25. It has stated that it is facing budgetary pressures far greater than experienced before due to factors beyond its control, but it has to legally set a balanced budget.

Derbyshire County Council has confirmed that its departments have been identifying the financial pressures their services are under and where savings or efficiencies might be made as part of the process of setting the council budget in February, for the financial 2024/25 year.

The council’s Improvement and Scrutiny Committee meeting, on December 14, considered the council’s budget-setting process and the plan to take a number of budget saving proposals to the cabinet meeting on January 11, 2024.

Feedback from the Your Council Your Voice public consultation which closed on December 17 will also be worked into the budget-setting process.

The scrutiny committee will further consider the budget at a meeting on January 22 and provide feedback before it is considered again by cabinet at a meeting on February 1 before going to a Full Council meeting on February 14.

Local Government Secretary Michael Gove claims to have linked poor leadership with the councils which have been forced to declare bankruptcy but he acknowledged that others which are well-managed may still face acute financial pressures.

Derbyshire County Council has a good track record with financial management but this is the biggest challenge the authority has faced for a long time, according to Cllr Spencer who described it as the ‘perfect storm’ with external pressures it cannot control or anticipate but it has not given up and it is trying to get the message across to the Government.

Cllr Spencer, who has been heartened to see inflation coming down, added: “The Government has to recognise there is a problem and come forward with the goods to address it because if they don’t come forward now it’s going to put local authorities up and own the country in a difficult place.”

The Labour Party has accused the Conservative Government of adopting a ‘reckless’ approach and Shadow Local Government Minister Jim McMahon said Labour would foster local growth and introduce longer funding settlements.

Chesterfield’s Labour MP Toby Perkins said: “I met with Cllr Lewis at the start of this week to discuss the pressures on Derbyshire County Council’s budgets and the urgent need for more funding from Central Government – particularly to pay for the spiralling cost of emergency care for children.

“I am not surprised that Cllr Lewis, and other council leaders are so angry at the proposed funding settlement, and the Government’s attempt to blame them for the problems in Local Government.”

Mr Perkins added that almost every council in the land, including Chesterfield Borough Council, is facing severe financial pressures particularly in areas of deprivation.

He has claimed that the rate grant from the Government for Chesterfield Borough Council should have been £12.7m if it had kept pace with inflation since 2010 but instead it is £3.5m.

Mr Perkins said that this means year on year the borough council, which is facing a £4m forecast budget deficit for 2024/25, must increase charges, raise additional income streams and cut services to stay solvent despite being a well-run council and it is still facing difficult decisions during a cost of living crisis.

He added: “The truth is local services have been decimated – particularly at Derbyshire County Council, meaning lots of children with Special Educational Needs aren’t getting the support they need, [and] older and disabled people and children struggle to secure adequate care as social care services are struggling to cope.

“A recent report by the County Councils Network showed that up to one in ten councils are facing effective bankruptcy. Whilst there have been individual problems with some councils, this is clearly about systemic underfunding and lack of support and a damning indictment of the Conservative Government and their mismanagement of the economy.

“I am glad that a Labour Government has committed to providing multi-year settlements that ensure local authorities can plan effectively. We will also deliver the growth needed so that we can provide the funding needed for public services.”