Derby reserves rise after £4m council underspend

Derby City Council says it ended the 2025/26 financial year with a reported underspend of just over £4 million, after meeting its full savings target for a second consecutive year.

The final year-end position is due to be presented to Derby Cabinet on Wednesday 10 June. The report sets out a stronger reserve position than in recent years, but the council says financial sustainability remains a live pressure rather than a settled issue.

The headline figures before Cabinet

The underspend means the council did not need to draw on its budget risk reserve to balance the books. Instead, the authority says the money will be used to increase reserves and strengthen future financial resilience.

That is a meaningful shift for a local authority operating under national cost pressures, but it does not remove the underlying demands on services. The figures are year-end accounts, not a guarantee that future budgets will remain in surplus.

Reserves strengthened, but caution remains

The general reserve fund is now reported at £15 million. For residents, reserves matter because they give a council more room to manage shocks, delays in funding, rising service demand or emergency costs without immediately cutting into day-to-day budgets.

Derby City Council links the improved position to tighter budget scrutiny, service transformation and changes in how Government funding works through the Fair Funding Reforms. It also says the full £9.861 million savings target for 2025/26 has been delivered.

Councillor Hardyal Dhindsa, Cabinet Member for Finance, Governance and Digital, said the £4 million underspend followed “responsible leadership and financial management”, while warning that the council must continue to be vigilant.

Service pressures still shape the budget

Children’s social care is reported to be in underspend for the first time in several years. The council says this is partly linked to early intervention work that has helped reduce the number of looked after children in the city.

The Dedicated Schools Grant has also moved to a less severe position than previously forecast. The in-year deficit has reduced from £7.8 million at the end of Quarter 3 to £7.085 million, although it remains a deficit.

Derby’s position may also be helped by the Government’s pledge to cover up to 90% of historic SEND deficits accrued by councils, representing around £21 million in Derby. Residents following care and support budgets may also want to read our related note on Derby care payments policy changes.

Capital projects moved into later years

Some parts of the council’s capital programme have been rephased into future financial years. The council says this has been done to match improved project timelines and does not reduce the scope of those projects.

The final 2025/26 accounts will be presented to Derby Cabinet on Wednesday 10 June. The meeting is expected to be available to watch through the council’s YouTube channel.

Source: Derby City Council

Context & actions About this article Report Share

Source check Source trail

This article is based on Derby City Council's published year-end finance update and keeps the figures within the limits of that source.

Checks

• Matched the reported £4 million underspend to the council's 2025/26 year-end position.
• Checked the stated £15 million general reserve balance and £9.861 million savings total.
• Kept the Dedicated Schools Grant and SEND figures separate from the main underspend.
• Identified Derby as the factual local scope rather than using the publisher name as a plac...

Derby City Council Check wider coverage

Source

Derby City Council

Scope

Derby

Updated

2026-06-03 20:56

Report

Article contextPeople & topics1#7

Hardyal Dhindsa

#Children's social care#Council budget#Derby Cabinet#Derby City Council#Fair Funding Reforms#General reserve fund#SEND funding

Share +15 DP