Mid Year forecast overspends in Derby City Council’s budget is an annual pre-Yuletide ritual; as is the highlighly engineered budget proposals masquerading as “balanced”. It is the charade that for years has been masked by depleting scarce reserves.

This year’s £9m dip into reserves has been described by the Chief Finance Officer as

“…a significant risk to the financial sustainability of the Council”

Each year a variety of Senior Council Officers and Councillors “cry wolf”. In amongst the superficial assertions that every corner of the Council’s spending has been examined with a fine toothcomb, and that committees have been established to challenge spending, there are still surprising savings and procedure changes which should have happened years ago.

Last year the Council boldly declared that it would save £3.925m through the introduction of Artificial Intelligence across its services. Despite its early forays into this new technology being the rather annoying Ally/Darcie bot, which seemed to function simply by transferring the inefficiency to the caller, the Council believed that it could bet a balanced budget on a Senior Officers fanciful pipe dream.

In the Cabinet report (13/11/24) for the Qtr 2 forecast on the AI saving, relating to the largest element of this package:

“Temporary deviation” is a wonderful euphemism for “failure to deliver”.

It is all credit to the Council that it found a different way to deliver the saving; the question is why was this not done before?

The implication of all of these new actions is that existing beneficiaries of care support will lose, collectively, £2.9m in financial help.

The £9m forecast overspend is due, in summary to:

• Unbudgetted pressures £27m, offset by…
• Unplanned income £11m, and budget underspends £7m.

The Pressures, which the Council will maintain were unforeseeable, represent a 10% error in budgetting! That is poor planning and budgetting.

Interestingly, the 2 main elements of the Unplanned income are:

• Changes to financial support given to vulnerable people requiring care support (see above) £4.5m ( A total of £7.4m taken from existing beneficiaries of care support)
• Government support actually being claimed ( not claimed before?) for Unaccompanied Asylum Seeker Children £2.5m
• Various health contributions £3.8m

The 2 main revenue fund reserves, at 1 April 2024 totalled £12.5m – a year later it is planned to be just £4.9m. The annual “travelling hopefully” planning methodology by the Council is that it will be able to contribute to reserves and finally turn the tide. Unless the Labour Government completely changes the funding formula, the Council will run out of revenue reserves next year This does not mean that the Council is bankrupt or that it has no cash to pay staff, but that within the accounting rules it has not spent within its means.

Like most Councils, 70-80% of its budget is driven by the growth in Adult and Children social care. The demand for this is dictated by legislation and, at that level uncontrollable, albeit many aspects can be predicted amd controlled through competent management rather than just, seemingly, reacting to events.

Derby City Council does not appear to use Intelligence, artificial or otherwise, to determine a most likely outcome, it seems to convince itself that the lessons of history and the reality of the moment don’t apply.

The novel notion of a “temporary deviation” is a curious modern day “newspeak”!