City can balance budget despite Covid-19... but council tax looks set to increase
INCOME LOST BUT COUNCIL FINANCE CHIEFS SAY IT WILL STAY SOLVENT
COUNCIL tax in Derby is set to rise by 4.49% from next April - 1.99% for council services and 2.5% for social care - if the proposal is approved at full council in February.
This will mean an extra £44.11 a year for properties in Band A, £66.17 for those in Band D and an extra £110.28 for a Band G property.
Derby City Council could have passed on the full 4.99% increase to cover social care, which is seeing an additional £8 million demand for services in the coming year, but instead the extra 0.5% increase will be passed on in the financial year 2022-23.
The final council tax figure that people will pay still has to include the amount Derbyshire police and Derbyshire Fire and Rescue Service will request, or precept, to run their services and this will not be available until February.
The council is adamant it can set a balanced budget without cuts to services and with a minimum of job losses. This is despite a loss in income from its leisure and culture area of £460,000 and in its parking fees of £1.046 million.
And it is against a background in Derby of more than 8,000 Covid-19 cases and in excess of 300 lives lost, 35% of the city’s workers being furloughed this year, more than 6,000 redundancies so far and 32% of commercial units empty in the city centre.
When the budget and recovery plan goes out for public consultation from Thursday, December 17, until the end of Jannuary, it will outline line how the council plans lans to balance the books.
Council chief executive Paul Simpson said that last February the council set a budget that was one of the most optimistic that had been set for a long time, with a 25% reverse of previous decade’s reductions. He added that the council was in “really good financial health” and looking forward to 2020-21.
He said: “But then six weeks later, the lockdown came and things were fundamentally different. It goes without saying this is the most challenging year ever and going into 2021, financial burdens have fallen on local authorit ties up and down th the country and som some are not doing as we well as others. “But w we mobilised this year and lin linked up with people from across the community, including business, and found ourselves looking outwards to work with the city and partners to take projects forward.”
Simon Riley, city council director of financial services, said there had been £28 million pressure on the council since the previous budget had been set.
He said: “This includes social care, mainly in relation to looked after children. The council still has priorities and so we have been looking at ways to do things more economically.
“We have lost money in leisure, rental and car parking which has scarred our financial position and will continue to do so.
“To offset the situation, the Government has given us just shy of £13 million and the ability to levy a council tax increase to pay towards social care and raise £2.6 million and then on top of that with savings, income, efficiencies and reserves amounting to £12.3 million we can set a balanced budget.”
The number of looked after children has increased from 480 in 2018, to 645 in December 2020.
The budget consultation paper does point out that the future remains uncertain because of several factors including people’s ability to pay council tax after job losses, reduced take up of new homes due to a slowdown in construction and the impact of Brexit.
There are plans in the budget for 39.4 full-time equivalent posts to be lost in the coming year. Of these the council says that 24 are existing vacancies, meaning that 15 jobs will be going - six of which are with the council’s leisure arm Derby Live.
Mr Riley added: “We are hopeful we can avoid compulsory redundancies where possible.”
Council leader Councillor Chris Poulter said the authority was in an “excellent budget situation” and would wait to see what the consultation would bring.
He also praised officers who had put the budget together and said projects such as Smart Park, a new research facility at Inifinity Park, the new performance venue at Becketwell and more development connected with the Our City Our River flood scheme would still be moving ahead in the coming year.
Councillor Nicola Roulstone, cabinet member for finance, added: “There has been some positive change in how we have approached this as a city. I hope residents will see this is a genuinely sensible budget and within there is some sensible decision-making. This includes £500,000 that we have put into the budget to support those in hardship in the post-Covid impact.”
The budget will be under discussion at next Tuesday’s executive scrutiny committee at 5pm and also at council cabinet on Wednesday, December 16 from 1pm. Both meetings can be viewed online at the council’s YouTube channel.
I hope residents will see this is a genuinely sensible budget.
Councillor Nicola Roulstone