A report to be considered by our Cabinet on 10 July details how we have reduced our forecast revenue overspend to less than half the original forecast overspend for 2023 to 2024 of £46.4 million which was first reported last September.
The forecast revenue overspend was due to external forces beyond our control which are still affecting our budget, including higher than anticipated inflation, higher fuel, energy and material costs and an increasing demand for services, particularly in adults’ and children’s social care.
The 2023 to 2024 pay award for staff which is agreed at a national level but funded at a local level, also added to the significant financial pressure.
On reporting the original forecast overspend last September, we immediately put in a number of strict cost-control measures including:
- freezing recruitment except for essential jobs, and reducing the use of agency staff
- reducing overtime
- reducing non-essential travel and training
- reducing print, IT equipment and stationery spending
- only carrying out health and safety repairs on properties
- where expenditure was non-essential, ceasing or delaying procurement for supplies and services and postponing projects still in the planning stage
Next week’s report details how a combination of the strict cost-control measures, additional income and grant funding, departmental savings and use of reserves resulted in an improvement of £24.7 million on the overspend sum originally forecast.
The final end-of-year revenue overspend of £21.7 million will be met from reserves.
While the overspend reduction has been welcomed, senior council leaders warned that the challenges affecting us and councils across the country, had not gone away.
A series of budget savings proposals put forward in February 2024, some of which have now been agreed following consultation, with others still being consulted on, remained necessary due to a predicted funding gap for 2024 to 2025 of around £40 million when the budget for the current financial year was approved.
Derbyshire County Council Managing Director Emma Alexander said:
“All services have worked incredibly hard to ensure the strict cost-control measures were followed and the use of every pound was and continues to be scrutinised.
“While the final overspend for 2023 to 2024 of £21.7 million is an improved position from earlier in the financial year, this has still resulted in a significant additional use of reserves which, if we are to keep the level of reserves at a safe level we cannot afford to happen this year or in subsequent years.
“The pressures remain as we continue to face significant inflationary cost pressures across all services, combined with continued growth in demand for adult care services, children’s social care and education, and increasing reactive and planned maintenance requirements across our highways infrastructure.
“We believe however that we have a solid plan in place and that the budget savings proposals we set out in February should help us to close the budget gap we have over the period of our Five-Year Financial Plan up to 2028 to 2029.”
In the report for consideration next week, it is detailed that while addressing significant budget pressures, 'good' or 'strong' progress has been made in 82% of the 45 key areas set out in the Council Plan.
Emma Alexander added:
“We are pleased to report the very positive progress that has been made in so many key areas set out in our Council Plan. Delivering good and improving services supports our overall efficiency and effectiveness and remains a key part of managing the financial challenges which continue to impact on the council.”
Key areas in the Council Plan include:
- safeguarding children
- good or better schools
- learning disabilities
- an integrated care system
- health and well-being advice
- the bus service improvement plan
- managing the council’s buildings/property assets
- the carbon reduction plan
- the digital strategy
- the local nature recovery strategy
- thriving communities