Ipswich Town expect to compete with Norwich City

Ipswich Town's managing director Ian Milne believes the club can compete with local rivals Norwich City, despite having a smaller budget.

The Canaries were able to use Premier League parachute payments to strengthen their squad following relegation.

Town did not pay a transfer fee in the summer, but are two points behind City.

Milne told BBC Look East: "We only lost 1-0 to them, we drew with Nottingham Forest and have had other good results. So is there such a great difference?"

He added: "Norwich are a very good team and managed to preserve their Premier League side.

Norwich striker Lewis Grabban (left) scored the only goal as Ipswich lost August's East Anglian derby

"If you're envious, you're going to miss the point. You have to look after your own and do what you can with the resources you have."

Norwich, who received £15m this season as part of the payments designed to help relegated Premier League clubs, were able to spend a reported £3m on Bournemouth striker Lewis Grabban in June.

Ipswich have undergone spending cuts in order to meet Financial Fair Play regulations, and have not spent a fee on a player since paying £10,000 for Tyrone Mings from Chippenham two years ago.

In August the Canaries won the first East Anglian derby for more than three years, running out 1-0 victors at Portman Road, but Mick McCarthy's side have gone seven games undefeated since then.

"Maybe Mick is the difference. Good managers can make all the difference - he inspires confidence," said Milne.

"Mick brings a great confidence, not only to the training ground, but to the whole club as well.

"People say we've done it on a budget - in transfer fees yes. But what we've got to remember are the salaries and it's that bill we have to watch.

"We will only just be in in the Financial Fair Play rules this year. So we have continued to spend."