Derby residents to be slapped with maximum council tax rise - but are told things could be a lot worse

Chief executive Paul Simpson thanked his team and members of the authority’s cabinet for “putting a very challenging budget together” in recent months.

Earlier this month the Labour-led Derby City Council proposed to increase council tax by 4.99 per cent as part of its budget proposals for 2025/26. That is the highest rise councils are permitted to make, without government approval or a referendum.

The council says it plans to cut more than 100 jobs (mostly vacant roles) in a bid to deliver savings of just over £10 million and a balanced budget.

The city council also plans an investment of £31 million into essential services and a “significant contribution” back into the council’s reserves.

The local authority said in a statement that the financial landscape for councils remains “extremely challenging” across the UK. They are facing a “perfect storm” of rising pressures to deliver rising demands in social care and homelessness services.

It has been well documented that some councils in the UK have had to declare Section 114 notices, effectively declaring bankruptcy, because they cannot balance their books.

It was recently reported that Nottingham City Council is operating “significantly beyond its means” and would need to raise council tax by nearly 50% to keep running as it has done

But Mr Simpson said Derby City Council’s financial position is not as bad as many other local authorities.

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Mr Simpson told a cabinet meeting this month: “I want to pay tribute to all the officers for putting a very challenging budget together. I also want to thank the leadership shown in what is an incredibly difficult period for local government.

“I know (for) the residents of Derby it is difficult when council tax goes up. But, actually, what would be worse is this authority being in the same situation as the likes of Thurrock, Croydon, Woking, Birmingham and Nottingham with a Section 114 which we aren’t.

“The fact we are putting a significant amount of money back into reserves and protecting our financial resilience is incredibly positive. It’s welcome.

“I won’t say we are proud of it because that might be misinterpreted. But nonetheless I think we can be proud we’ve done a good job in incredibly challenging circumstances.“