The Council's Budget

We have a statutory requirement to set a budget each year by 11 March and to set the level of Council Tax.  The budget determines how much we can spend on frontline services. The budget is based on the money we receive from direct Government funding and through Council Tax. We also apply for grants, if they are available. 

The council only set the precept and Council Tax level for the services that we provide. Parish councils set their own individual precepts.  The council has no veto over the levels set by parishes.

The Police and Crime Commissioner for Derbyshire is responsible for local policing and raises Council Tax for that reason. You can find details about the police budget by visiting the Police and Crime Commissioner website and searching for ‘Precept’: Office of the Derbyshire Police and Crime Commissioner.

The Derbyshire Fire and Rescue Service sets Council Tax for the fire service. You can find details about their budget by visiting: Derbyshire Fire and Rescue Service.

We are required by law to collect Council Tax on behalf of the County Council, Police, Fire and Rescue Service, and Parish councils and then pay it over to them. So you may think that all of your Council Tax goes towards paying for Borough Council services but it does not.

A lot of people ask this question because they don’t realise the large number of services that we, as a Council, have to deliver. We don’t just collect bins and process planning applications. Details on all the services we provide are summarised in the Councils Budget report.
 

Council Tax is made up of a general charge, that covers all services – not just the ones people use directly. We all benefit from council services, even though we might not realise. For example:

• If you eat at a local restaurant it will have been given a license by the council and inspected to make sure the food is safe.
• When you or your neighbour wants to extend their house, we make sure they have the right planning permissions.
• When someone is homeless we help them find a place to live.
• We keep the streets clean and look after our green spaces.

These are just a handful of the services we deliver and which all taxpayers contribute towards. We don’t think this is unfair.

Even if we did, there is little we could do to change this because the Government has decided these are all legal duties which councils must carry out. 

Many Councils have reduced support for those unable to pay bills but we have not.  If you’re on a low income you can apply for Local Council Tax Support. This scheme offers financial assistance and is means tested, so we look at your household income and savings to work out if we can help. If you qualify, we could reduce the amount of Council Tax you need to pay. If it sounds like we could help you, please complete an application form.

Anyone struggling to pay their Council Tax should come and speak to us or seek advice from Citizens Advice or the Money Advice Service.  We work closely with them and they may be able to help.  

We raise money from Council Tax, Business Rates and receive some money direct from Central Government departments. We also charge for many services to help cover costs. However, most of our money comes from Council Taxpayers.  How much money we get is decided by Government.

Yes, but all councils are getting less money from Government each year.   

If you look at the Governments own figures, the investment in councils was £44.9bn in 2015/16 and today it is £69.4bn.  The investment is going down in cash terms. Erewash got £12.2m core funding in 2015/16 but today we are getting £12.8m. 

The Government argues that councils have more money not less.  This is because they expect councils to raise council tax by the maximum amount each year.  

The Government makes the rules about how much councils can raise council tax.  This year we can raise council tax by up to 2.99 per cent. The Government assumes that councils will do this.

We know that the price of everything is going up – whether that be food, energy, clothes or anything else.  

In our experience prices are going up more than three per cent. In this context a 2.99 per cent rise in our Council Tax feels reasonable.  It equates to £6.39 a year or 13p a week for a Band D property.  

But the council understands that for some this will be too much and has support available.  
 

No, the statistics are quite revealing:

• Core spending power is well below average for 2025/26.
• Erewash Borough Council is in lowest 14 per cent for core spending power out of 164 districts.
• Since 2015-16 our council tax has gone from 43 per cent of core spending power to 60 per cent today.
• Over the same time Government funding has gone from 57 per cent to 40 per cent.
• Our Government funded spending power at 40 per cent is below the average of 43 per cent.
• If we had average spending power per household we would receive £3.078m more funding each year.

This is a good question and we do need to spend much less but let’s explain some of the challenges we face:

There are lots of things we must do

We have some statutory services that we have to deliver (such as planning, waste management) and then there are other services we must provide to enable other statutory duties to be met.  The Local Government Authority, Guidance for New Councillors, stated that local authorities in England are subject to “1,300 different statutory duties and responsibilities”,  so we can’t pick and choose what services to provide.

Many services are demand led

Many of the services we provide are what we call demand-led i.e. the amount we spend depends on the level of customers we have and their needs. For example, if someone is homeless, then we must help them get off the streets.  We have to even if we don’t have the money.

The demand for local services is increasing, as the result of a growing and ageing population.

Cost of services is increasing

The Council is just like any household in the UK which finds that the cost of its bills go up every year. Our services are delivered through a combination of our staff and suppliers, or contractors.

Contractors and suppliers pass on cost increases to cover pay rises for their staff or inflation on goods.

Changes to the national minimum wage and pensions have also increased the cost for suppliers, who, in turn, pass these costs on to us. We try to resist the increases where possible.

On top of ‘inflationary’ rises, subtle policy changes from Government or court rulings can also increase our costs.

One example of this is the Freedom of Information Act. This provides public access to information held by public authorities. We are obliged to publish certain information about our activities and members of the public are entitled to request information from public authorities. 

We spend around £12m on staff salaries. We often get feedback saying that our staff earn too much, or that pay increases are too high and rise and we should cut these. It sounds simple but the reality is somewhat different.

Firstly, the pay rises given to staff are decided at a national level and agreed with the Unions. Council staff do not give themselves pay rises. The Unions ask for significant pay rises that cover the cost of living but rises have been kept minimal. The average pay rise has been at 2% or lower for the past eight years. There has been no increase at all in some years.  

Secondly, salary levels are decided by a Job Evaluation system. If we don’t apply the right salary to a job we can end up paying more. For example, in the past, we have pitched certain salaries too low and struggled to fill vacancies as a result resulting in us paying higher rates for agency and interim workers while we continued trying to recruit full time staff.

Cutting salaries may be a simple solution but may have a different impact in reality. We want to recruit and retain the best staff so that we can provide the best possible services. 

This is something we are doing. We review all charges every year and look for areas where it would be appropriate to increase them, to try and generate more income to cover costs.  The “cover costs” bit is important.  We aren’t allowed, for the most part, to make profits.