Crunch debate called over Derbyshire's huge budget black hole

A crunch debate is to be held over the financial crisis at Derbyshire County Council.

The “extraordinary” debate has been triggered by five members of the council’s Labour Group, including its leader and deputy leader.

This comes after opposition members were calling for more chances to scrutinise the current state of financial affairs at the council. It declared a forecast £46 million overspend in September which has now been reduced to £33 million.

Opposition councillors made the move after the overspending was announced, particularly because it was revealed the day after a full council meeting at which the issue could have been discussed in full – but it was not brought up by authority leadership.

The extraordinary meeting, which will take place several hours before the scheduled full council meeting on Wednesday, November 29, will see councillors able to question the authority’s chief finance officer and leader Cllr Barry Lewis on its financial position and efforts to clear the now £33 million forecast black hole.

An update report to be discussed tomorrow (November 23), which the Local Democracy Reporting Service analysed last week, details the reduction in the forecast overspend.

It also flags the impact that emergency actions have caused, including the freezing of all non-essential spending, a hiring freeze, assessment of agency staff and analysis of all ongoing projects.

The council details that all work has been “paused” on the 6km Chesterfield-Staveley Regeneration Route project – the county’s most expensive infrastructure scheme – which increased in price from £130 million to £166 million last December.

It also details that the cost of borrowing associated with the Sinfin Waste Plant legal settlement has cost the county council an additional £2.3 million in “interest costs relating to the increased need to borrow”.

This legal settlement saw the county council contribute £56.93 million to settle the dispute over the facility, with Derby City Council contributing £36.57 million – with the joint bill totalling £93.5 million.

READ MORE: https://www.questmedianetwork.co.uk/news/glossop-chronicle/council-chiefs-manage-to-cut-crippling-46m-budget-black-hole-by-a-third/

The report also said the council is now looking to rehash its community library project, announced in 2018, which aimed to hand over 20 of its least-used libraries to volunteer-run groups.

Meanwhile, the council has also “paused” and “reduced” all work relating to cutting its carbon footprint, having committed to becoming carbon-neutral by 2032 or sooner and to help Derbyshire as a whole get to net-zero emissions by 2050 or sooner.

The council said vacancy controls it has put in place have already led to slower response times for building repairs and an increased risk of not being able to clear trees and fallen branches from roads and properties – in the wake of recent havoc caused by Storm Babet.

It says budgets for winter road maintenance will be exceeded if the season is above the “average severity of winter”, meaning temperatures that are colder than experienced in the past five years.

Of the gap closed in the forecasted overspending, £1.5 million comes from within adult social care; £2 million comes from highways and transport; and £3.3 million comes from corporate services and budget.

Cutting the gap from £46 million to £33 million was partially achieved by using a further £9 million in emergency earmarked reserves – which it had already set aside.

The council does hold a separate pot called the general reserve which it detailed in September was not large enough to cover the gap in costs, especially after having drawn £55 million from it to reach the current year’s budget.

That pot of money stands at £28 million and is “considered to be the minimum level of general reserve for an organisation the size of the council”, indicating that finance officers are looking to avoid using it any further.

It also says that while work continues to meet this year’s target, the target for next year’s budget is already starting and “cost pressures and demand for services are expected to remain high”.