Maximum council tax hike rejected by councillors

Derby City Council leaders were forced to abandon plans to raise council tax by the maximum amount permitted after the plans were blocked by opposition councillors at a meeting on Wednesday night.

The Labour-led minority council had proposed a council tax rise of 4.99% as part of its budget plans for the upcoming year, which also include £10m worth of cuts to services.

However, the Conservatives and Reform labelled the rise "crippling", and grouped together with Liberal Democrat and Independent councillors to force a lesser rise of 3.99% instead.

They also imposed an additional £1m for spending on parks, a move Labour criticised as "preposterous".

The council is facing emerging pressures on its finances amounting to almost £40m in the next year.

Speaking at the end of the roughly five-and-a-half-hour meeting, much of which was spent in deadlock over the plans, the Labour leader of the council Nadine Peatfield called the changes "irresponsible" and said it would lead to further service cuts in next year's budget.

The estimated cost of the reduced council tax will mean the authority will have over £2m less to spend in the immediate term.

The reduction amounts to an annual reduction of about £1.3m going forward on current plans, which will be funded by less money than planned being invested into depleted reserves.

Nadine Peatfield said a maximum hike of 4.99% would have marked "an era of recovery" in the finances whilst also protecting the most vulnerable.

The Labour leadership lost a council vote on their original budget plans by one vote, at 23 votes for and 24 against.

The Conservatives eventually forced the changes to the budget with the new tax increase and parks investment, which was voted through on 25 to 23 votes.

Labour claims that the government had given the authority an extra almost £23m to spend across the council proved a major sticking point of the meeting, with opposition councillors accusing the party of "misleading" the public with claims it represented new money.

Nadine Peatfield told the meeting: "You were presented tonight with a responsible budget that set us back on a responsible financial footing, that's gone."

She later told the BBC after the meeting she was "upset" and "so angry".

"This neglect to protect our reserves...without that resilience we creep closer and closer to the danger zone," she said.

"A reduction in council tax also means...our priorities are reduced in terms of improvements to services."

Peatfield said that although she recognised the public would be pleased not to see a maximum tax hike, the consequences are that the council "can't deliver the things that [the public] want us to deliver".

Steve Hassall, the leader of Derby Conservatives told the BBC it was "absolute nonsense" the change would hurt the council's finances going forward.

He said he wanted to prevent a maximum tax rise to lessen the impact on struggling families, whose taxes he said were already going up under Labour.

He cited the winter fuel allowance cut for most pensioners and the national insurance hike for employers as examples.

"My amendment this evening was to address in a small way the negative impact the Labour government are inflicting on the public, particularly pensioners.

"We're relieving the pressure, albeit very very slightly."

The budget includes roughly 100 job cuts, a move expected to save the authority £4m.

A significant portion of the budget cuts will be in adult and children's services, which forms the bulk of the council's financial pressures.

It is expected a review of home-to-school transport contracts and further work to identify where artificial intelligence can be deployed in adult care will inform further cuts in the near future.

Alongside the cuts, a number of areas will see investment, including one-off grant funding for museums and other culture sites, plus investment in grass cutting, a service that had faced hundreds of complaints in the past year.

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