Derby’s Labour-led council faced a stinging defeat last night as opposition councillors blocked their proposed maximum council tax rise.
The minority administration had sought to implement a 4.99 per cent increase as part of its budget plans.
Instead, a coalition of Conservative, Reform, Liberal Democrat and Independent councillors forced through a lower 3.99 per cent rise.
After the five-and-a-half-hour meeting ended, the opposition also securing an additional £1million for parks spending.
Labour council leader Nadine Peatfield branded the changes “irresponsible” and warned they would necessitate further service cuts next year.
The council is already grappling with financial pressures of nearly £40million for the coming year. The opposition’s move will reduce council income by over £2million in the immediate term.
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Proposals to raise council tax are being brought forward by local authorities
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Going forward, the council faces an annual reduction of about £1.3million based on current plans. This shortfall will be covered by reducing planned investments into the council’s depleted reserves.
The Conservative-led amendment passed by a narrow margin of 25 to 23 votes. Labour had initially lost their original budget proposal by just one vote, 24 to 23.
During the heated debate, opposition councillors accused Labour of “misleading” the public about government funding.
They challenged claims that an extra £23million represented new money for the authority. Peatfield told the meeting: “You were presented tonight with a responsible budget that set us back on a responsible financial footing, that’s gone.”
Speaking to the BBC afterwards, she expressed her frustration, saying she was “upset” and “so angry”.
“This neglect to protect our reserves…without that resilience we creep closer and closer to the danger zone,” she warned.
“A reduction in council tax also means…our priorities are reduced in terms of improvements to services.” She added that the council “can’t deliver the things that [the public] want us to deliver”.
Conservative leader Steve Hassall dismissed claims that the changes would damage council finances as “absolute nonsense”. He defended the lower tax rise as necessary relief for struggling families.
“My amendment this evening was to address in a small way the negative impact the Labour Government are inflicting on the public, particularly pensioners,” he told the BBC.
Hassall specifically cited the winter fuel allowance cut for most pensioners and employer national insurance increases. “We’re relieving the pressure, albeit very very slightly,” he added.
The Conservative leader positioned the move as a response to tax increases already imposed by the national Labour government.
Included in the Budget was approximately 100 job cuts, expected to save the authority £4milion.A significant portion of the cuts will affect adult and children’s services, which form the bulk of the council’s financial pressures.
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Households have been saddled with soaring tax bills in recent years
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The council is planning a review of home-to-school transport contracts to identify further savings. Officials are also exploring where artificial intelligence can be deployed in adult care.
Despite the cuts, some areas will see investment through one-off grant funding. Museums and other cultural sites will receive additional support.
There will also be investment in grass cutting, a service that had generated hundreds of complaints over the past year. The reduced council tax rate represents a significant financial challenge for Derby City Council.
The £2million immediate shortfall will limit the authority’s ability to rebuild its reserves. Peatfield had argued that the original 4.99 per cent increase would have marked “an era of recovery” in the council’s finances.