Derbyshire council leader reveals tough cost-cutting plans to reduce predicted £46m budget overspend

The cash-strapped council is facing a financial crisis and has lready announced it is to stop all non-essential spending and implement a hiring freeze, due to a predicted overspend on its budget of £46m by next March.

Cllr Lewis, of the Conservative-led county council, told a Cabinet meeting on Thursday, September 21, that the council is already working very hard and is looking at essential and non-essential services, hoping to lobby Government for support and looking at staffing and overtime.

He said: “You will all be very familiar with the issues we have found ourselves in as an organisation and it is far from ideal to be in this situation at Derbyshire County Council.”

Cllr Lewis added that the council is proud of being a “well-run organisation” but it has found itself in a “terrible situation” similar to other councils like Somerset and Shropshire struggling with inflation, wage increases, the cost-of-living crisis and cost pressures.

He also said: “We will work hard as an authority to work through this particular issue. Even in the last few days we have been having in depth discussions to get to the bottom of these issues.”

The forecasted £46m overspend is far in excess of the amount of money the council holds in its emergency reserves to meet a legal duty of a balanced budget which should also be preserved for other needs.

The council now aims to look at its ear-marked reserves in an effort to control the looming multi-million pound deficit as Cllr Lewis said he was sure the council will be able to manage this “terrible situation”.

Cllr Lewis is particularly concerned about protecting social services and children’s services but he said the council hopes that by taking the right action and adopting the right measures savings can be made to reduce the overspend.

The Cabinet approved a report which highlights the pressures on its finances in the current financial year and the “cost control measures” that are to be implemented in an attempt to reduce the forecasted £46m overspend.

In an officially released statement following the meeting, the cost-cutting measures were formally announced as follows:

A recruitment freeze – although some jobs will continue to be recruited to where they are essential, such as social care front line positions; Reducing agency staff; Reducing overtime and additional hours worked by employees; Reviewing all agency staff; No non-essential conferences, travel or training; Only health and safety repairs on properties; Reducing spend on print, IT equipment and stationery; Delaying any contracts not yet signed; And postponing any projects that are still in the planning stage.

External forces affecting the council’s budgets have included higher than anticipated inflation which is impacting all areas of council expenditure including fuel, energy and materials costs, according to the council.

It also claims that high inflation has had an impact on the demand for council services, particularly in adult social care and children’s services, where the council has seen a continued increase in demand.

In addition, the council stated that the expected 2023/24 pay award for its staff which is agreed at a national level has placed a significant financial pressure upon the authority and this will have to be met from local council budgets.

The council also argued that across the country, many local authorities are experiencing similar issues and many of which are much more severe than in Derbyshire.

Derbyshire County Council added that its proposed strategy will be to take early action, show prudent financial management and contain these external pressures and avoid more serious future consequences.

Cllr Lewis said: “We are taking immediate action to control our spending. This is not a bankruptcy situation for this council, far from it. However, to be completely clear with our residents, employees and partners, this is a difficult situation and we must rise to the challenge.

“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.

“The decision taken today by Cabinet is the first step on our journey to get our finances back on the right track.

“Our employees are now tasked with looking at every penny they spend, to make sure it is essential and value for money.”

The council has prevously announced that it is also looking at possibly selling off its County Hall building, at Matlock, which may be converted into a hotel, or residential space, offices and community facilities.

It has also previously announced plans to close ten of its Chesterfield area offices, and it has been looking at cutting opening hours and bringing in potential charges at its househild waste tips.

Opposition Labour leader Joan Dixon has said that 13 years of local Government funding cuts by the Conservatives and financial mismanagement by the leading county council group are to blame for the council’s plight.

County council Lib Dem Leader, Ed Fordham, said the Governemnt has starved councils of investment and that the poor handling of the economy and inflation were to blame for the situation the county council has found itself in.