Labour councillors failed in a bid to get more cash allocated to help community groups in Belper.
At a meeting of the town council, they urged members to move money from its bank account into a separate grants fund.
Councillor Peter Shepherd told the October meeting:”We have got £300,000 in reserves.
“That’s a lot of money and it’s ratepayers’ money. It is there to use.”
The issue arose with a request for £2,290 from Fleet Arts, an organisation which helps to provide activities for young people in the town.
It has already received £5,000 from the council this year.
The council decided to refer the matter to its finance committee before discussing it again.
Conservative councillor, Peter Arnold, said there was a shortage of money in the fund set aside for grants.
“We could be dishing out money we have not got. The finance committee needs to look at this.
“If you’re going to bypass them then you are wasting your time being on the finance committee,” he told the meeting at St Johns Chapel.
But Labour councillor Alan Broughton said Fleet Arts deserved the extra cash and added:”This council has always committed itself to working with the youth of Belper.
“That group does exactly that. We should be transferring money to make sure we can make this grant.”
In a letter to the council, Fleet Arts said Belper children formed the majority of youngsters attending its events. A total of 35 per cent were from outside the area.
The organisation primarily works with disabled, people on low incomes and people in rural areas to help them engage with the arts.
A mural for the children’s centre was created by 123 people and all of them were residents of Belper, the group added.