Further Council Cuts Near £100 Million

The required future savings that Derbyshire councils say they need to make total nearly £100 million.

This is despite the UK’s Chancellor of the Exchequer stating that the “era of austerity is finally coming to an end”.

The reductions in public funding aimed at reducing the nation’s budget deficit have been dubbed “austerity” by opponents.

They were started in 2010 by the coalition government and Prime Minister David Cameron.

At the start of the year, Derbyshire County Council had put forward plans to cut £53 million from its budget by 2022.

In September, this had shot up to £70 million, taking the total the authority says it will have saved between the start of austerity and 2022 to £327 million.

Its total budget for the current year was £503.2 million.

Earlier this month, High Peak MP Ruth George queried Government claims that there had been “real-term” increases in council budgets.

In response, the Secretary of State for Housing, Communities and Local Government, James Brokenshire, said: “I recognise the challenges that local government has faced over the past few years and how councils have played their part in dealing with the public finance challenges brought about by the Labour Party.”

He said that investment was being made to “create a sustainable position for local government”.

A spokesperson for the department said it was working with local authorities to “develop a funding system for the future based on the needs of different areas”.

The county council is proposing funding cuts of £18.5 million next year in its steps towards the £70 million savings.

The authority’s director of finance, Peter Handford, stated that the council “continues to face significant cost pressures”.

In July, he emphasised the need for the authority to keep on top its savings targets, to avoid worsening its financial situation.

He said: “We face a tough balance as an authority of resources versus our revenue budget.

“We have had to use £18 million from our reserves to ameliorate some of the pressures, but the difficulty will be ongoing – I can’t under-emphasise that at all.”

Meanwhile, in Derby, the city council is aiming to make £12 million in savings next year with £22.84 million to find up to 2022.

Deputy leader, Conservative Cllr Matthew Holmes said that “many of the decisions that we are going to make will not be easy” and called it an “extremely challenging situation”.

Derby’s budget this year is £217.8 million.

Both authorities have pledged to lobby central government for more funding for adult and children’s social care – with the two authorities proposing further council tax increases next year to ease budget pressures.

Meanwhile, at Derbyshire Dales District Council, a spokesperson says that the authority’s spending power has been reduced by £287,000 since last year.

It is predicting a further reduction of £350,000 next year, and savings have been allocated to cover that.

Going forward, until 2020, the authority must find a further £800,000 in savings.

Its total budget this year is £35.8 million.

At Amber Valley Borough Council, a spokesperson says that the authority has been affected by the removal of the Revenue Support Grant from central government.

This will see £3.6 million cut over the course of 2017 to 2020.

The authority has already achieved half of this saving, £1.8 million, and must now find an additional £1.8 million.

Its total budget this year is £52.1 million.

At Erewash Borough Council, the authority made £700,000 of savings this year, and is looking to make £2.7 million over the years 2019 to 2021.

At least £1.2 million of these cuts are likely to be made next year, with the remaining funding reductions yet to be determined.

Its total budget this year is £50.8 million.

Over at South Derbyshire District Council, the authority is looking to cater for its future funding deficits by pulling from its reserves – which are at “healthy” level.

It is forecasting a deficit of £723,481 for next year, with a total cumulative shortfall of £1.3 million predicted up to 2023.

This will have dramatic impact on the level of its general reserve, which would fall from £9 million this year, to £7.5 million next year, and to £2.2 million in 2023.

However, this remains above the minimum level of £1.5 million.

This strategy has been judged to be “high risk” by the council’s director of finance and corporate services, Kevin Stackhouse, who wrote: “The deficits in future years were projected to be significant.

“If no action were taken to reduce future deficits, it could quickly de-stabilise the financial position given that any action to achieve budget savings may take time to fully implement.”

The authority had a surplus of £778,399 this year.

Mr Stackhouse says that the current forecast is a “worst case scenario” and will be subject to many changes over the next few years, due to the Brexit fallout and general changes in government funding policy.

He says that the funding position is updated throughout the year and the authority is always looking to plan at least two full years ahead, removing the need for any quick money-saving decisions.

Mr Stackhouse says that the council’s revenue is set to grow as a result of new housing in the district.

The council’s total budget this year is £45 million.

A Ministry of Housing, Communities and Local Government spokesperson said: “Councils in Derbyshire will have access to over £1.4 billion this year and next which they should use to meet the needs of their residents.

“We are investing in Britain’s future, and at budget we announced more than £1 billion in extra funding for local government to address pressures on services.

“On top of this, we’re giving councils the power to retain the growth in business rates income.”

Eddie Bisknell (LDRS)

Eddie writes for Nailed through the Local Democracy Reporting Service, in partnership with the BBC. The Local Democracy Reporting Service is a partnership of media outlets sharing reporters to cover council meetings.

2 thoughts on “Further Council Cuts Near £100 Million

  • 17th November 2018 at 4:34 pm
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    8years of cuts has already devistated many Council services with families and the elderly often left in desperate situations. We now have a report from the UN on the level of poverty across the country, 14 million people living in poverty & 1.5 million people living in destitution. The Report stated that communities were being destroyed with the closure of libraries, youth centries, parks & community spaces. More cuts to local services can only make matters worse & destroy lives further. Austerity has not ended and will not end until we had lost all vestiges of what makes us a civilised society. The rich are protected by their wealth, there is no protection for the rest of us.

    Reply
  • 19th November 2018 at 7:45 pm
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    Erewash Borough Council faces budget shortfall of about £1.5M. which will have come out the reserves.
    The council had nine years years council tax freeze and modest growth. Instead of fixing the roof when the sun was shining they squandered growth opportunities for short term political advantage.
    The previous Labour administration left them £40M. capital funds from the transfer of the council houses. This has also been frittered away with nothing to show for it. Since 2010 the council has seen a 44% drop in income and instead of investing in growth areas, the one area which could provide income, if properly managed, leisure facilities, they are outsourcing so the profits go to the private sector!!!

    Reply

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