Derby City Council has reported a year-end underspend of just over £4 million for 2025/26, with its full savings target met for a second consecutive year.
The final accounts are due to go before the Derby Cabinet on Wednesday 10 June. The figures show a stronger short-term position for the authority, although the council says it still faces pressures affecting local government across the country.
The headline figures in Derby’s year-end accounts
| Measure | Reported position |
|---|---|
| 2025/26 underspend | Just over £4 million |
| Savings target met | 100% |
| Total savings delivered | £9.861 million |
| General reserve fund | £15 million |
| Dedicated Schools Grant in-year deficit | £7.085 million |
The council says the underspend means it has not needed to draw on its budget risk reserve to balance the books. Instead, the money is being used to increase reserves and strengthen financial resilience.
That does not mean all financial risk has disappeared. A year-end underspend can improve headroom, but future budgets will still depend on service demand, inflation, government funding and the cost of statutory duties.
Reserves strengthened after savings target is met
The general reserve fund now stands at £15 million, according to the report. For councils, reserves act as a buffer against unexpected costs and can help reduce reliance on emergency budget measures.
Derby City Council says the position has been supported by financial management changes and by the impact of Fair Funding Reforms. The authority also says it has delivered 100% of its planned savings for the second year running.
Councillor Hardyal Dhindsa, Cabinet Member for Finance, Governance and Digital, said the £4 million underspend reflected “responsible leadership and financial management”. He said the council had worked through innovation, service transformation and stronger scrutiny of historic budgets.
Readers following local authority finance may also want to compare this with another council stability update in Shropshire, where savings and service pressures are also central to the local debate.
Children’s care and schools funding remain key pressure points
The report points to improved trends in children’s social care, which is reporting an underspend for the first time in several years. The council links this partly to early intervention work that has reduced the number of looked after children in the city.
The Dedicated Schools Grant is also in a less severe position than previously forecast. The predicted in-year deficit has moved from £7.8 million at the end of Quarter 3 to £7.085 million.
Derby’s position may also be helped by the Government’s pledge to cover up to 90% of historic SEND deficits accrued by councils. For Derby, the council says that could represent around £21 million.
Cabinet will review the final position on 10 June
Some parts of the council’s capital programme have been rephased into future financial years to match updated project timelines. The council says this does not reduce the scope of those projects.
The final 2025/26 year-end position will be presented to Cabinet on Wednesday 10 June, with the meeting available to watch on the council’s YouTube channel.
Source: Derby City Council
Source check Source trail
This article is based on Derby City Council’s published year-end finance update and keeps the figures tied to the reported accounts.
- Checked the reported £4 million underspend against the council statement.
- Checked that the £15 million reserve balance and £9.
- Separated confirmed year-end figures from future cabinet consideration on 10 June.
- Kept SEND and schools funding context within the limits of the council’s published update.
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- Derby City Council
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- Derby
- Updated
- 2026-06-03 20:57
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