Derbyshire council tax bills could rise by £30 in the coming year

Derbyshire residents could be paying up to £30 more in council tax if the County Council goes ahead with proposals to increase its precept by 2.5 per cent – half of the maximum amount central government has allowed.

Thursday, 21st January 2021, 11:37 am

One per cent of this will be specifically for adult social care, out of the three per cent on offer from central government.

The council aims to use the remaining two per cent hike in 2022.

For Band D homeowners this year’s hike is an increase of £33.73 a year to £1,383.07, while for Band A homeowners, it is an increase of £22.49 to £922.05.

Derbyshire County Council wants to increase its council tax precept by 2.5 per cent

Other authorities also have their own precepts which make up your council tax bill.

In the county area, excluding Derby, this includes the fire and police services, the local district or borough council, and in some areas a town or parish council.

The district and borough councils and police service have not yet put forward their council tax proposals for the financial year 2021 to 2022.

Derbyshire Fire and Rescue Service is planning a 1.98 per cent increase of its precept, which for Band D homeowners is £1.54 extra to £79.27.

Peter Handford, Derbyshire County Council’s head of finance, said that the authority’s precept is the lowest out of the 14 other shire counties which provide the same services.

He shared a grim overview of the financial risks in the years to come for the county council and a potential look into decisions which could cost residents dearly and services cut drastically.

Mr Handford shared that the council must make £72.6 million in cuts by the financial year 2025 to 2026, of which the authority has currently identified £38 million (around half, down from 80 per cent last year).

This £72.6 million is on top of £300 million in cuts it has had to carry out since 2010.

Its budget for 2021 is £571.7 million.

He said the authority is faced with ‘difficult decisions’ over its plans for the next few years and suggests that continual low council tax increases could hurt it down the road – leading to a total freeze on all but essential finances in a worst-case scenario

The finance chief pointed the finger at a failure from central government to provide sufficient funding for children’s and adults social care – safeguarding the county’s most vulnerable.

Mr Handford said that there is currently ‘no intention’ to serve this freeze on the council’s finances – a Section 114 notice – however it remains a ‘going concern’.

He continued: “It will continue to require difficult decisions to be made and strong, robust financial management.”

“Experience and investigations into those councils experiencing financial failure demonstrates that periods of lower than allowed council tax rises can contribute significantly to exacerbate other financial issues.

“Setting a low council tax will mean that there will be some difficult choices in respect of 2021-22 priorities.

“There is a clear and significant challenge to identify savings to bridge the remaining savings gap and plan the best approach to achieving those savings over the next few years.

“The achievement of these savings is critical in ensuring that the council balances its budget.

“Certain budget savings that were identified in the last medium term plan have since proved to be unachievable and others need to be found to substitute for them.

“The pandemic has slowed down the council’s savings programme and departments will be playing ‘catch-up’ in the next financial year whilst battling with delivering new savings proposals.”

Mr Handford added that there is a continued risk of not achieving a balanced budget and that the authority should plan to not rely on using its general reserves (rainy day fund) to cover overspending and savings shortfalls.

In a worst case scenario, he said, the council’s general reserve could fall to £5 million over the next few years.

However, he says a pessimistic estimate would be that it falls to £24.5 million by the end of the coming financial year, starting in May, and fall to £9.6 million by the financial year 2025 to 2026.

Detailing the main issues facing the council, he said: “Pressures across both children’s and adult social care continue to far outstrip the additional grant offered by the Government.

“Furthermore, these costs are likely to increase significantly in later years.”

He said children’s services budget issues were being pushed by rising numbers of looked-after children – assisted by the authority through adoption and foster care and under child protection plans, adding that the number of children in the council’s care is due to increase.

Coun Barry Lewis, the council leader, said: “We are facing budget pressures like never before as we see demand for adult and children’s social care continue to rise and extra challenges placed on each department and its services due to the current pandemic.

“We have welcomed significant extra government funding for social care and to help meet Covid costs in the past year and the council remains in a stable position financially.

“However, adult and children’s social care budgets will continue to fall short in future years due to demand and increased costs.

"While we work hard on innovative and enterprising ways to provide these vital services we need a longer term solution to funding.”

“We realise that many households are facing extra pressure themselves due to the pandemic and we do not want to add any extra financial burden to residents which is why we’ve worked hard to propose the lowest council tax increase that we can.”

This is how much more each council tax band would owe if the 2.5 per cent increase is approved:

Band A – £922.05, up £22.49; Band B – £1,075.72, up £26.23; Band C – £1,229.40, up £29.99; Band D – £1,383.07, up £33.73; Band E – £1,690.42, up £41.23; Band F – £1,997.77, up £48.72; Band G – £2,305.12, up £56.22; Band H – £2766.14, up £67.26.