Derby City Council has improved its financial stability, reducing its in-year overspend and reliance on reserves, despite the ongoing challenges facing local government.
In a report detailing the final accounts for the 2024/2025 financial year, that will be presented to the Council’s Cabinet next week, Derby is reporting a more stable financial position despite continuing pressures from significant increases in demand for social care and homelessness, inflationary increases and the ongoing cost of living crisis.
Due to sensible interventions, Derby significantly improved its financial sustainability, managing predicted overspend down from an expected £9.643 million in Quarter 1 to £3.996 million at the end of the year. This position has been strengthened by £10.5 million of underspends across the organisation and welcomed additional government funding.
Crucially, reliance on General Fund reserves has also reduced, down to £0.493 million from a Quarter 1 forecast of £5.769 million as a large proportion of the final overspend was funded by contingencies held by the Council.
The figures that will go to Cabinet next week show that at the end of 2024/2025, the general reserve fund has a balance of £8.658 million, supporting the Council’s plan to replenish its reserves by £10.140 million over three years. Additionally, 100% of the £8.121 million 2024/2025 savings target has also been achieved.
Councillor Kathy Kozlowski, Cabinet Member for Governance and Finance said:
We’ve had to work hard as a council to get to this position, and I’m grateful to all our staff who have helped us find new ways of working. I’m very pleased to see our accounts moving to a place of greater financial stability because it puts us on a firmer footing for delivering the services our citizens need.
Derby is reporting a much better position than many other local authorities, and the Chancellor of the Exchequer’s recent announcement of a three-year Local Government comprehensive spending review and fair funding reforms for the sector is welcome news. However, we are not out of the woods yet and must continue to be vigilant.
The continued financial sustainability of the Council continues to be a priority for us, allowing us to invest more into essential services that support some of our most vulnerable residents whilst also creating resilience for the future.
The Council’s final year end position for 2024-2025 will be presented to Cabinet on Wednesday 9 June. The meeting will be available to watch on the Council’s YouTube channel.