Halfway through the financial year, the Council is in a strong fiscal position, with the revenue budget forecast to balance by the end of March 2027. 

This is an improvement on a predicted slight overspend reported at the end of the first quarter and reflects careful management of pressures across services.

Being balanced at this stage means the Council’s general reserve is set to remain at a healthy £15.8 million, which is within the Council's policy range. All £7.1 million of savings planned for this year are also on track to be delivered.

This is despite demand for services remaining a challenge, particularly in Adult and Children's Social Care and Housing. This reflects difficulties seen by councils across the country.

The report also sets out the position on the Council's other budgets, and there is good news for the Dedicated Schools Grant (DSG). Government approval of Derby’s Local SEND Reform Plan means the Council is now eligible for a grant which would cover 90% of the deficit built up to March 2026. Once received, the grant would reduce the Council's cumulative deficit from £32.7 million to around £11 million. Further support from the Government will be confirmed by the Department for Education as part of their spending review plans.

The capital programme, which supports regeneration and investment across the city, is forecast to spend £177 million this year, slightly lower than the budget approved in February. This is due to changes in the programming of some major schemes which will still be delivered. 

Councillor Hardyal Dhindsa, Cabinet Member for Finance, Governance and Digital, said: 

This report reflects our continuing sound financial management, achieving a forecast balanced budget halfway through the year, meaning we can keep our necessary reserves at a healthy level.
 
However, we can't be complacent. Demand for adult and children's social care and for housing support continues to grow, and we know there are challenges ahead. The news that our SEND Reform Plan has been approved is also welcome and will make a significant difference.
 
While we are still understanding the impact of the Chancellor's budget announcement last week, there are measures which will support us as we strive to protect essential services and invest in our city's future. Extra funding to tackle homelessness is very positive, and it is good to see the Government recognising the challenges of providing temporary accommodation, which is essential to protect some of our most vulnerable residents, but has added pressure to our Council budget in recent years.
 
I also welcome the measures that will ease the pressure on residents and businesses and give them some breathing space. The £100 for households in bands A to D will be a welcome help with the cost of living, and businesses with a rateable value between £12,000 and £18,000 will be exempt from paying business rates, which will benefit many businesses in Derby.
 
I particularly welcome the announcement of Good Growth funding, with £285m of funding being devolved to regions to spend on the priorities for their communities. Similarly, the ability for regional Mayors to retain a 20% share of local business rates from next year. Through being part of the East Midlands region, Derby stands to benefit from both of these, and I'm encouraged for how this will support our ambition for our city and its residents.

The Quarter 2 Financial Monitoring report will go to Cabinet on Wednesday 11 November. The meeting starts at 2pm and can be viewed live on the Council's YouTube channel.