Derby City Council has published proposals for a balanced budget that will continue to protect essential services in the face of ongoing national challenges, as well as highlighting areas for future investment. 

The proposals, which will be reviewed by the Council’s Cabinet later this month, include a robust three-year Medium-Term Financial Plan (MTFP) from 2026/27 to 2028/29 that would see £26 million invested into Derby for over the year, with plans for a further £33 million during the following two financial years.

The financial landscape for councils remains extremely challenging across the UK. Increases in demand, inflation, interest rates and prices have made it much more expensive to provide essential services and support Derby’s most vulnerable citizens.

Over the past decade Derby, like many other councils, has experienced a significant increase in demand for services, such as adult social care. Spending has risen by £101 million (48%), with £60 million of this increase occurring since 2021. As a result, the Council has delivered savings of around £112.5 million since 2016/17.

However, the Government is proposing a change in the way that councils are funded through their Fair Funding Reforms. The reforms aim to simplify the system, move to multi-year funding allocations and make sure that funding goes to the areas that need it the most to ensure that all councils have the necessary funds to provide essential services.

The finer details of the new system have yet to be revealed, but any additional funding could allow Derby City Council to invest in services for the first time in recent years.

Key areas for proposed investment align with the Council Plan, which sets out priorities from 2025-2028, and include work to make communities and the city centre feel safer, collaboration with partners to reduce poverty, and continued work to address rising costs and demand to support the city’s most vulnerable residents. The MTFP also has a strong emphasis on building resilience and reserves in the face of the ongoing challenges facing local government.  

Councillor Nadine Peatfield, Leader of the Council and Cabinet Member for City Centre, Regeneration, Strategy and Policy said:

After delivering more than £260 million in savings since 2010, we are thrilled to be in a position where we could be seriously investing back into our city. Our proposals demonstrate that our mantra of responsible leadership has paid off. Once again, we can deliver a balanced budget, whilst continuing to prioritise putting people first and building a city to be proud of. 

Protecting our most vulnerable residents, creating a vibrant city and reducing poverty have always been priorities for us and these proposals allow us to continue our work in these key areas, and many more.

Councillor Kathy Kozlowski, Cabinet Member for Governance and Finance said:

We absolutely welcome the Government’s reform of the way that councils are funded and eagerly await more information to get more clarity about what this means for Derby and our ability to further invest into our city.

It’s now essential that the people who live, work and study in Derby join the conversation and help us to shape the budget for 2026-27.

The proposed balanced budget for 2026/27 includes savings of £7.756 million, mitigating the budget gap that was predicted in October’s Medium Term Financial Strategy. The savings will be achieved through continued controls on spending and careful financial management, as well as through innovative projects such as the Council’s pioneering Artificial Intelligence (AI) programme, which is predicted to bring savings of almost £1 million.

Crucially, for the first time in many years there are no plans for staff redundancies or a reduction in Council staff. The proposed investment into services will create more roles, particularly in areas such as Adult Social Care.

This year’s proposals would also see Council Tax increased by 4.99%, with 2% of this ringfenced for social care. This is the assumption used by the Government in its funding allocation and is a necessary step in supporting a balanced budget. Proposals to expand Derby’s Council Tax Support Scheme - which already benefits 16,993 households – were well received in a recent public consultation.

Alongside the budget proposals, Cabinet members will also be asked to approve implementation of the revised Council Tax support scheme, which could see a further £1.4 million of additional relief for more households with the lowest incomes.

After the Council’s Cabinet has reviewed the proposals on Wednesday 17 December, members of the public are invited to join the conversation and share their thoughts via the Let’s Talk Derby website.

The Cabinet meeting will be available to watch live on the Council’s YouTube channel. The proposals can be found on the Council's website.