South Derbyshire taxpayers are set to pay up to £5 more to the district council - as the authority prepares for potential financial difficulties over the next few years.

The District Council is on track to either raise its share of council tax by either 2.98 per cent or 1.95 per cent.

The choice comes down to a balance between affordability for residents and bringing in much-needed cash to be able to provide services for the district.

Next week, the authority will discuss how much it should raise its portion of council tax by – the authority accounts for about 10 per cent of your overall bill.

Council officers are currently planning for a 1.95 per cent hike, an extra £3.28 for Band D homeowners and a total of £171.24 to the district council.

Derbyshire County Council, the police and fire services and in some areas, town and parish councils, make up the rest of your tax bill.

The county council makes up the lion's share, at around 75 per cent of the bill, and has approved plans to raise its portion by three per cent – £41 extra for Band D homeowners, to a total of £1,424.56.

South Derbyshire officers wrote in a report discussing the potential tax rise this year that a 1.95 per cent increase would leave the authority with less than a million pounds in its general reserve – its rainy day fund – by 2025.

They say "opting for anything lower than a 1.95 per cent increase will ensure that savings measures – without any other funding changes – will need to be implemented sooner for the council to remain in a sustainable financial position into the future".

Its reserve would drop to £985,672 by 2025, due to the need to rely heavily on this fund to bail it out each year to set legally balanced budgets and avoid a spending freeze or service cutbacks.

Officers also write: "If the council was to increase the council tax by £5 (2.98 per cent) per Band D in 2022/23, this would not put the council back to the minimum balance by 2025/26, but it would certainly ensure a stronger position into the future."

This rate would see its general reserve at £1,255,623 by 2025, £269,951 higher.

Officers write: "Although the balance in the general reserve can be utilised to fund the projected deficits over the next few years, this is not a sustainable solution in the longer-term."

A couple of key budget pressures for the council include a loss of £20,000 per year from Forestry England, which had paid the authority for the upkeep of Rosliston Forestry Centre.

Forestry England had initially said it was scrapping its payments but has agreed to pay £6,000.

Meanwhile, the authority says the tenant of a factory premises in Hearthcote Road, Swadlincote, has an option to break their lease in March 2023.

It says that if the tenant chooses to leave it is "unlikely" the premises would be re-let quickly due to its size and configuration, potentially losing £196,000 per year in rent.