Erewash Borough Council ended the last financial year spending £1.651 million less than expected – with its total usable reserves now set to top £15 million.
The figures are revealed in a new financial report going before councillors next week and offer a snapshot of the council’s finances at a time when local authorities across the country continue to warn about increasing financial pressures.
But while an underspend of more than £1.6 million may sound like money that could be spent elsewhere, the reality is more complicated.
Most of the money has already been earmarked for future commitments or is due to be transferred into reserves, meaning it cannot simply be redirected into day-to-day services.
If approved, Erewash Borough Council’s usable reserves will stand at £15.316 million from 1 April 2026. That includes a £2 million General Fund, which acts as the council’s financial safety net, alongside a number of reserves set aside for specific purposes.
The council says the underspend was achieved through a mixture of lower spending and higher-than-expected income during the financial year.
Among the biggest savings were lower temporary accommodation costs after the council changed provider during the final quarter of the year. Officers also say they resisted significant rent increases requested by some supported housing providers where they believed they did not represent value for money.
Income also exceeded expectations in several areas.
Planning applications generated more income than forecast, while stronger-than-expected investment returns also boosted the council’s finances. Earlier financial monitoring reports showed that the application for the proposed Fassa Bortolo manufacturing facility at New Stanton Park generated a significant planning fee, contributing to the increase in planning income.
The report also highlights savings from lower bad debt provisions, improved waste disposal costs and other efficiencies achieved during the year.
So where is the £1.651 million going?
According to the proposals, £500,000 has already been set aside to help prepare for Local Government Reorganisation, which is expected to reshape councils across Derbyshire over the coming years.
Another £500,000 has been transferred into the Erewash Investment Fund, while £92,000 is being allocated to support work on the borough’s new Local Plan.
Around £171,000 will be carried forward to pay for projects that had already been approved but were not completed before the end of March, with the remaining £383,355 proposed for the council’s Financial Sustainability Reserve to help meet future budget pressures.
Separate to the underspend, councillors are also being asked to approve the transfer of £367,850 received through an insurance claim and compensation relating to the former Mark Street building in Sandiacre into a capital reserve for future investment projects.
The proposals will first be considered by Erewash Borough Council’s Scrutiny Committee before going to the Council Executive later this month.
For residents, the figures are likely to prompt different reactions. Some will see an underspend as evidence that the council has managed its finances carefully during another difficult year for local government. Others may question whether more of the money could have been invested in local services.
Either way, the decisions taken over the coming weeks will determine how the £1.651 million underspend is used – and how the council plans for the financial challenges that still lie ahead.
One Comment
Now that the unitary authority has been accepted, what will happen to any remaining money in EBC. The council tax payers of EBC have paid it in for the Council services provided to Erewash by Erewash Borough Council and its grossly unfair that this should be absorbed into a unitary authority for other areas.