Derbyshire County Council’s leader has welcomed the government's announcement that is going to provide £600m extra funding to England’s financially struggling councils but like many others he still feels this is not enough.
Levelling Up, Housing and Communities Secretary, Michael Gove, previously announced that £64bn would be made available for councils for the 2024-25 financial year, but after some Conservative MPs called for more funding, a further £600m has now been made available for councils across England.
A share of £500m from the overall £600m will be earmarked for adult and children’s social care, which are two areas that have been identified by Derbyshire County Council as being in desperate need of support.
Derbyshire County Council leader, Cllr Barry Lewis, said: “We welcome the additional funding for social care announced by the government, which has resulted from lobbying of government by local authorities including Derbyshire and by the County Councils Network.
“This extra funding will help to address escalating costs across social care accrued over the last 12 months as a result of a spike in demand for services and historically high inflation, and we will be working through the detail when we get the amount finalised to decide where best to target it.
“However, we know it won’t solve the financial challenges we face and we will still need to make some tough decisions over the coming months.”
The Conservative government’s decision to provide further funding appears to have been in response to a County Councils Network letter – backed by Derbyshire County Council – warning that councils are preparing to cut services to balance their budgets and prevent potential bankruptcy.
As part of the latest support from the government, Mr Gove has said that the rural services delivery grant would rise by £15m in recognition of the challenges faced by authorities serving dispersed populations, which is a difficulty Cllr Lewis has highlighted concerning Derbyshire County Council’s responsibilities.
If any local authority fails to meet its legal obligation to balance its yearly budgets, they may have to issue a Section 114 notice which could effectively see them fall into ‘bankruptcy’ and give up control to Central Government, and potentially lose control over their finances and spending.
Conservative-led Derbyshire County Council has reduced its estimated in-year 2023-24 budget shortfall of £46.4m to £34.1m and it is working hard to compile tough saving proposals to meet an estimated budget deficit of around £40m for the 2024-25 financial year, which begins on April 1.
Deputy Derbyshire County Council Leader, Cllr Simon Spencer, has revealed that meeting services for the needy in society including the elderly and the young makes up as much as two-thirds of the council’s budget which is the biggest proportion.
The county council has already stopped non-essential spending and implemented a hiring freeze, reduced residents’ capital entitlement limit for adult care from £50,000 to £23,250 and has increased the cost of a school meal by about 41 per cent.
It is also considering saving proposals to services including those that are likely to affect the elderly, disabled and children, as well as considering selling off its office headquarters, County Hall, at Matlock, which could become a hotel, offices and homes.
Struggling Chesterfield Borough Council, in Derbyshire, has also produced a Budget Implementation Plan outlining a number of far-reaching cost-saving measures and proposals to address its estimated £4m budget shortfall for the 2024-25 financial year.
It has already approved increasing fees at Chesterfield’s town centre car parks by about 10 per cent and introducing nominal fees to its currently free Residents Parking Scheme from the start of the financial year.
The Labour-led borough council has also been looking at many cost-saving measures including possibly ceasing or reducing services, considering the use and management of its buildings and parks, how it supports public advice agencies, and the introduction of digitalisation.
Derbyshire County Council says redundancies among its workforce cannot be ruled out as it examines retraining, redeployment and leaving empty posts unfilled, and Chesterfield Borough Council has said it will have to look at voluntary redundancies and voluntary retirement options while avoiding the need for compulsory redundancies where possible.
Derbyshire County Cllr Barry Lewis previously expressed his disappointment after the government’s Autumn Budget appeared to have done little or no favours for financially struggling local authorities.
Ministers claimed that the government funding settlement of £64bn for local authorities represents a 6.5 per 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 10 per cent increase.
Both Derbyshire County Council and Chesterfield Borough Council have argued many councils across the country are experiencing similar external, financial issues beyond their control due to high inflation rates, Covid-19, the cost-of-living crisis, rising costs and demands on services.
Councillor Lewis added: “To ensure we can continue to provide vital services our most vulnerable rely on, and to continue to meet our legal obligations to maintain a balanced budget, tough decisions need to be made now.
“Our lobbying of the government will continue, especially focusing on the spiralling costs of private social care placements for children, which I have been very vocal about recently.
“Despite our lobbying and the government’s announcement of extra funding this week, we have had no choice but to put forward a number of budget savings proposals, many of which, if they go forward, will change, reduce or even stop some services we provide.
“And for the first time in many years, we are proposing the maximum allowed rise in council tax, when we have always tried to keep it as low as possible.
“No council leader wants to see a reduction in services or a rise in council tax, and we are acutely aware of the additional burden this is likely to place on many Derbyshire households, but we have been left with no alternative.”
The government intends to impose conditions for councils to receive any extra funding including cutting wasteful spending and that they show evidence of productivity plans on how they aim to improve services.
County Councils Network chairman Tim Oliver welcomed the additional funding service but said service reductions will still be necessary for councils in some areas.
Labour councillor Shaun Davies, who chairs the Local Government Association, and Cathie Williams, joint chief executive of the Association of Directors of Adult Social Services, welcomed the funding, but indicated it was not enough and more needed to be done.
Derbyshire County Council’s cabinet is due to consider a Revenue Budget Report for 2024-25 on February 1, when it is expected to make its budget recommendations, which will then be considered at a full council meeting on February 14 before being finalised.
Many of the county council budget savings proposals – if they are agreed to move forward – will be subject to further cabinet reports followed by appropriate public engagement or consultation before any final decisions.
Chesterfield Borough Council has also been asked for its reaction to the government’s latest funding announcement for local authorities but it had not responded by the time of publication.