Struggling Derbyshire County Council denies 'bankruptcy situation'

The council said it was facing financial pressures beyond its control

Derbyshire County Council has denied it is in a "bankruptcy situation" despite facing a £33m budget black hole.

The authority has revealed it is struggling to balance its books this year even after imposing strict spending curbs in September.

An immediate ban on all non-essential travel and a recruitment freeze were among the cost-cutting measures.

However, council leader Barry Lewis has now warned of further "difficult" cuts before the end of the financial year.

A new report said a £46.4m overspend, predicted in the autumn, has been reduced but Mr Lewis said more significant savings would be needed before April.

He blamed inflated fuel, energy and materials costs, and a continuing increase in demand for adult and children's social care.

He also said a pay settlement for staff, agreed nationally but funded by the council, had added to the significant pressure on its finances.

'Challenging position'

Conservative Mr Lewis said: "The reality is that the financial pressures we are facing, along with other councils and households, are now greater than ever experienced before, with most of these pressures being simply outside our control.

"Although we are still in a challenging position this is not a bankruptcy situation, and we will continue to do all we can in the second part of the financial year to ensure we get back on track and reduce the overspend further."

The council said it had used a further £9m of reserves to reduce its overspend this year but added that the £28m left was not enough to plug the anticipated gap.

It said there were no plans to issue a Section 114 notice - an effective declaration of bankruptcy - in the current financial year.

However it said it was still waiting to hear how much government funding it would get in future years.

The council's cabinet will discuss future savings when it meets next Thursday.