Response to the Spring Budget

Published: 8 March 2024

The Leader of Derby City Council, Councillor Baggy Shanker, responds to the Government's Spring Budget.

We all await the outcome of the Government’s Spring Budget. Just as we want to know whether our households will be worse or better off, so the Council also needs to know what the future holds for our income.

It will take some time to understand what the Chancellor’s speech means for Derby City Council, and how it will affect our Medium Term Financial Plan.

However, in some respects there are no surprises. We know the Government wants the public sector to be more productive. We are already leading the way on this in local councils as we continue to transform our services to work better and more efficiently for our citizens, including the use of emerging technology.

In his speech the Chancellor said day-to-day public spending would continue to grow by 1% in real terms. This is disappointing when we, along with our colleagues in the local government sector, have been lobbying for funding reform and there is still no commitment to adequately fund local services – the Council’s funding has reduced by over 20% in real terms in the last decade. The lack of commitment to multi-year financial settlements will continue to intensify the fragile nature of our financial sustainability.

Calls from the Chancellor for councils to spend less on so-called diversity projects, in the run up to the Spring Budget, were a distraction from the real issues about sustainable funding for the local government sector. In real terms we have one half-time post devoted to equality and diversity, and achieve a lot with very little spend.

It’s important that the Council represents every citizen of Derby, and that we make our city welcoming and accessible for all. For example we’ve recently worked hard to get funding for more changing place toilets and inclusive play equipment in our city parks, so families can enjoy the facilities together. This is also part of the Government Disability Action Plan.

I welcome the announcement that the Household Support Fund will continue after April, which we called for.  However I’m disappointed that this is only guaranteed for a further six months and we had to wait until the very last minute for an extension. Thousands of families in the city continue to benefit from this vital support during the cost of living crisis, and this need is not going away any time soon.

Massive reductions in Government funding since 2010 have left us and other councils less resilient to economic shocks and rising demands, and makes us more dependent on one-off funding like the Household Support Fund.

As we know, high inflation, interest rates and rising prices have continued to make it more expensive for us to provide services for our city, as demand for those services continues to grow. This is not unique to Derby.

Many councils, including our neighbours, have found themselves in a less fortunate position. Nottingham City Council has had to make a Section 114 declaration because it is unable to set a balanced budget, meaning Government intervention. Derbyshire County Council is facing immense pressure on its finances. As we’ve seen recently, both have had to make some extremely tough decisions about funding services.  

Thankfully, we are not facing that prospect this year, but without a reform of national funding, this risk remains for future years.

Last week this Council approved a responsible, balanced Medium Term Financial Plan for the next three years. It is not the budget that we, or anyone else would want to propose, but we remain ambitious and positive for our city.

Democracy