DERBY City Council is to see its income reduce by an additional £5 million next year following the Government's funding settlement announced this week.
The Department for Communities and Local Government has revealed Derby's overall income will be cut by 2.3% next year – equating to £5 million.
That reduction is higher than the national average of 1.7% and much higher than neighbouring authorities of Nottingham and Leicester, whose cuts are 0.5% and 0.1% respectively.
And the news is worse for the following year, when that cut will be 5% – more than £10 million.
Councillor Sarah Russell, cabinet member in charge of finances at Derby City Council, said: "This is another kick in the teeth to local authorities. It confirms what we have always believed and that is local government is bearing the brunt of spending cuts.
"I can only speculate on why it is that Derby is getting such a raw deal compared with other authorities. Maybe it is because we are standing against the Government on some of its policies."
What is not clear is how the latest reduction in income will affect the budget on which the council is currently consulting and is due to set in January.
The funding settlement lets the council know by how much its overall "spending power" will be reduced – this could mean smaller direct grants from Whitehall or rules that set a cap on how much money it can raise on its own, such as through council tax – and some of this could relate to specific areas of its budget.
Until these details are known, the city council will not be able to calculate where cuts have to be made and where it will need to change plans to bring in more cash.
Miss Russell said: "The timing was always tight with this Comprehensive Spending Review announcement only being made this week. But, because there are still so many gaps in the information Government has provided, it is affecting our ability to prudently plan our budget."
She said the settlement for 2014-15 was particularly worrying. "Councils were always told the cuts would be front-loaded, so it would be worse at the beginning, but that is not the case at all because we are seeing the spending power cut more in 2014-15."
When the Telegraph asked the Department for Communities and Local Government why Derby had received a raw deal in the settlement, Local Government Secretary Eric Pickles claimed it was a fair funding deal.
He said: "Councils must do three things to get on the right road for their residents: put our fair funding deal to work; do every single one of our 50 ways to save; and accept our council tax freeze offer. Councils that cry wolf without having done all of this are letting their residents down.
"Councils that put their thinking caps on now can save precious taxpayer pennies next year by cutting out waste and transforming frontline services that vulnerable people rely on."
Miss Russell said Mr Pickles' suggestions were "patronising" as the council was working hard to save money wherever possible.
