Cuts likely to get deeper as Derby City Council has to save another £2.5m

A FURTHER £2.5 million may have to be sliced from Derby City Council's future budget as a result of the Government's Autumn Statement.

Made last week, the statement by Chancellor George Osborne sets out the Government's spending for the coming years.

And while some of the headlines – such as money towards super-fast broadband – made good reading for the city, officers warn the overall calculation could still leave Derby losing out.

Council leader Councillor Paul Bayliss said officers have spent days poring over the details of the statement after it was published on Wednesday.

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"After un-picking what's been said, we think it will mean an additional £2.5 million cut from the council's budget in 2014-15," said Mr Bayliss.

The council is currently consulting on its draft budget which sets out £20 million of cuts to come in 2013-14.

A further £42 million will have to be made in the following two years.

The Autumn Statement means, during 2014-15, an additional £2.5 million will have to be saved.

Mr Bayliss said: "It's not good news for Derby I'm afraid. That £2.5million will mean things we have kept in this year's budget will have to be looked at again. That's things like Derby Live funding."

The council is having to consult on 350 voluntary redundancies as part of planning the budget. It is not clear if the additional £2.5 million would have any impact on those figures.

And Mr Bayliss said even where there were positive announcements for Derby in the Autumn Statement, detail was thin and often raised more questions than answers.

"The Government did announce that we'd been successful in our bid to its fund for super-fast broadband but as yet we don't know how much we will get," he said. "It is a £50 million fund and 12 authorities were successful so if it is shared equally we will get £3-£4 million but we don't know anything yet."

And whatever the Government does invest, the council will be obliged to match the funding.

It is also in a similar position with flood defence spending. Ministers announced Derby had been shortlisted for money to implement its master plan for flood defence work.

The council wants to encourage developers to build along the river front, incorporating flood defences into underground car parks.

While Government has shortlisted Derby for a slice of £120 million for additional flood defences, the bidding criteria have not been released and match funding would be required. Derby City Council has not built such funding into its capital programme yet.

Mr Bayliss said other uncertainties surround changes to small business rate relief. This is being extended to April 2014.

However, it is not yet clear if this cost will be absorbed by the council or the Treasury.

If it is not shared or absorbed by Government it will mean an additional £238 million cut to local government – Derby's share is not yet known.