Derby City Council leader warns of 'absolutely dire' finances

A cabinet meeting was held on Wednesday

Derby City Council's leader has described its finances "absolutely dire" and its chief executive has called for urgent help.

Baggy Shanker, its Labour leader, and chief executive Paul Simpson were speaking at a cabinet meeting.

Mr Simpson called the financial situation "extremely challenging",

He said support was needed across local government, citing other councils that had issued Section 114 notices as they could not balance budgets.

After taking over as leader from a Conservative-run administration following elections in May, Mr Shanker has said efforts must be made to increase the council's own savings.

A report said one of the authority's main reserve pots had a "current year forecast balance of zero", with a forecasted overspend of more than £6m on its main revenue budget.

Speaking at the meeting on Wednesday, Mr Simpson said councils issuing Section 114 notices was "becoming a regular occurrence" and that more help was needed from central government.

'Very serious situation'

"That is not to say that's where we are at, for the avoidance of doubt, but the situation we are facing in local government is an extremely challenging one," he told the meeting.

"I think it is incumbent on all of us - politicians and officers - to do whatever we can to support the need for additional funding for local government.

"The reality is something needs to happen for local authorities to remain sustainable so we can continue to provide good quality local services that local people and local businesses want and need."

Conservative councillor and former leader Chris Poulter said he felt the new Labour administration had made up an "imaginary money tree" in its spending so far to help save Ashgate Nursery from closure and provide a £150,000 loan for The Quad.

Mr Shanker said his party "have inherited a very serious situation".

"In 2018 when the Conservative administration took office there was £36m in the budget risk reserve and, as you can see in this report, the budget risk reserve has a current forecast balance of zero," he said.

"That's an absolutely unsustainable position."

Mr Poulter left the council chamber at the start of Mr Shanker's response to the concerns he had raised, the Local Democracy Reporting Service said.