Report by Local Democracy Reporter – Jon Cooper
Reform-led Derbyshire County Council’s Leader has blamed the Labour Government for increasing cost pressures on local authorities and for introducing an increase in employer national insurance contributions as the council looks set to implement a three-year council tax rise.
Council Leader, Cllr Alan Graves, outlined the council’s Budget Saving Proposals and Medium Term Financial Plan at a Cabinet meeting on January 12 which assumes an on-going 4.99per cent increase to council tax between the three financial years of 2026-27 to 2030-31.
The cash-strapped council is considering setting its council tax rate at its maximum for the next three years and it is planning to introduce £22.4m worth of new savings with potential cutbacks expected across a number of areas to help meet a forecast £37.8 million shortfall and to balance its budget for the 2026-27 financial year.
Cllr Graves told the meeting that the council’s report has looked at how this situation will be managed with the need to make £22.4m in savings to deliver a balanced budget for 2026-27.
He added that the report also highlights two problems from the Labour Government including increasing cost pressures on councils and the introduction of an increase in employer national insurance contributions.
The council claims it is also facing ‘economic uncertainty’ and ‘significant cost and demand pressures’ after a period of high inflation and the cost-of-living crisis with continuing increased demand for council services particularly in respect of social care with Children’s Social Care and to a lesser extent in Adult Social Care after the agreed closure and planned sale of nine care homes.
Total spending for the council for the next year stands at £838m including reserves with a highlighted budget shortfall of more than £37m with plans for £22.4 million in savings in the 2026-27 financial year alongside plans to raise a substantial sum from council tax.
It outlines that the authority will need to find an additional £66m in budget savings by the 2030-31 financial year.
Budget proposals approved for 2025-26 already included significant savings requirements across all departments with the funding of only essential or unavoidable service pressures and a limited use of reserves and an increase in council tax.
And Derbyshire County Council has argued it is facing factors beyond its control including pay and price inflation and rising demand and costs for services, particularly in adult and children’s social care.
Cllr Graves also blamed the council’s previous administration for exhausting the authority’s reserves to address a projected multi-million pound budget deficit which has left the current administration drawing on only £186,000 worth of reserves for the 2026-27 financial year.
The council’s former Conservative administration before the May election had claimed it was on track to achieve over £31m of savings by the end of the 2024-25 financial year with tough cutbacks to manage a previously forecast budget deficit of over £39m for the 2024-25 financial year while identifying £18.6m of further necessary budget savings for the 2025-26 financial year to set a balanced budget.
Despite the new Reform UK-controlled council – elected in May – forecasting in October a promising net overspend of just over £1.3m against a Revenue Budget for the 2025-26 financial year of over £770.5m after the first quarter, it has now revealed its ongoing strategy will need to involve necessary ‘new savings plans’ for the 2026-27 financial year.
The Reform council is also having to calculate what the Government’s financial funding settlement for the authority, which is yet to be finalised, means for 2026-27 to 2028-29 and it is considering a new Fair Funding Review change which consolidates a large number of grants into core funding and seeks to rebase a council’s overall funding level against an assessment of its need for funding.
Derbyshire County Council’s new proposals aim to deliver £22.4m of savings in 2026-27 to support meeting the forecast budget funding shortfall and it says the remaining shortfall will be made up from £2.5m of savings with changes to the way the council operates and with £12.9m to be saved from corporate budgets.
The council’s ‘savings plans’ could see a review of fee rates for home care, the closure of Glossop household waste recycling centre, changes to the community support beds system in care homes to reduce costs, more technology to support adult social care, and a service redesign with a ‘transformation’ department to introduce greater efficiencies alongside the removal of long-term vacancies across corporate services.
The ‘transformation’ programme aims to save at least £19.2m and potentially up to £38.7m over a two-year period right up to the expected changes under Local Government Reorganisation, according to the council.
But the council’s latest report, entitled Budget Savings Proposals 2026-27 to 2030-31 and Update to Medium Term Financial Plan, states that the future modelling contained within the MTFP assumes an ongoing 4.99per cent increase to council tax.
It outlines that the authority will need to find an additional £66m in budget savings by the 2030-31 financial year.
The report stated: “It should be noted that the MTFP shows that, on current projections further savings will be required to be found over the course of the three-year financial settlement to ensure the budget is balanced.”
Opposition Labour Group Leader, Cllr Anne Clarke, has accused the Reform administration of ‘breaking its promise’ to cut taxes and she argued that the only cuts residents are seeing is to their vital services like care homes and a waste tip.
She also argued that the Labour Government has just announced a huge multi-year funding settlement for the county council of over £160m which she says is a rise of 22per cent compared to just £31.9m under the Conservative Government.
But Cllr Graves claims this funding settlement is a ‘redistribution exercise, not a growth plan’ with money being moved away from rural counties like Derbyshire and redistributed to large cities and urban authority tiers while the county council continues to face a rising demand for Adult Social Care with higher rural area costs and unresolved SEND pressures.
Opposition Conservative Group Leader, Cllr Alex Dale, has also accused the Reform administration of ’empty rhetoric’ based on previous promises to cut taxes and opposition Green Party Leader, Cllr Gez Kinsella, accused the Reform council of misleading Derbyshire residents.
Cllr Dale said: “It’s now painfully clear that Reform’s promise to ‘cut your taxes’ plastered across leaflets and campaign material right across the county in last year’s elections, was nothing more than empty rhetoric.
“Residents were sold a simple slogan, but the reality is that those promises were as worthless as the paper they were printed on.”
Cllr Kinsella said that at the last election Reform’s leaflets said they would ‘cut your taxes’ and they criticised others who ‘keep raising your council tax’ and he accused Reform of misleading Derbyshire people.
Reform Cllr Stephen Reed, Cabinet Member of Business Services, has argued Reform had only promised to cut wasteful spending and cut taxes ‘nationally’ and he refutes claims the new Reform UK administration had previously pledged to cut council tax levels and that it is now doing a u-turn due to a significant loss in funding and financial insecurity.
Cllr Reed argued the council is having to consider the Government’s funding settlement and Fair Funding Review in the context of the financial pressures caused by the growing demands for children’s social care and adult social care.
He claims the Labour Government has told the council it needs to raise its council tax rate to 4.99per cent and the Government’s decision to increase employer national insurance contributions alongside an increase to the minimum wage is ‘eating into the budget’ and ‘hurting all councils’.
Cllr Dale acknowledged that the financial environment for Local Government is extremely challenging but he claims that during five out of the last eight years of the former Conservative administration’s reign it rejected the option of pushing council tax up by the maximum five per cent but it had instead opted for more modest increases of two or three per cent.
The Reform Cabinet noted its budget and saving proposals for 2026-27 and its Medium Term Financial Plan forecast at its latest meeting and it referred the plans to a Resources Scrutiny Committee meeting on January 14.
A budget-setting report will be further considered by the Cabinet at a meeting on January 29 before the matter goes to a Full Council meeting on February 11 for all the councillors to consider before any final decisions.
