An ever-shrinking budget leaves Thanet council at ‘high risk’ of having to slash services, make large scale redundancies and having the authority managed by outside sources in the coming years, according to a report by finance officer Chris Blundell.
The corporate risk update, due to be discussed by councillors on the governance committee on March 4, says limited resources is “one of the few risks that in extremis could result in the council losing control of its own destiny”- meaning external auditors could take control if the authority were to run out of funds.
Decreased budgets
Thanet council has a £17.1 million budget to fund services during April 2020 – March 2021.
The pot is made up from council tax, fees and charges, retained business rates and Government funding.
This year there is a predicted £1.3million shortfall and that is expected to rise to £2.5million by 2023. The financial black hole comes amid plunging income from Government.
The Revenue Support Grant to Thanet from central government was £97,000 for the 2019-20 financial year. In 2018-19 it was £809,000 and in 2017-18 the grant stood at £1.446m. This is compared to £6.636m in 2013-14.
A one year government settlement of £100,000 has been made for 2020-21. Plans to end the government revenue support grant altogether have now been moved from 2020 to 2021.
Money from the government’s New Homes Bonus has dried up as TDC has not qualified for it since 2016-17, apart from small amounts for affordable housing growth.
Thanet’s core spending power has been slashed by almost 40% since 2010, the most of all Kent authorities.
In the risk report Mr Blundell says: “Due to national political uncertainty and an unresolved Brexit, the Chancellor confirmed that councils will now get a ‘one-year roll-over settlement’ for 2020-21.
“This has severe implications for financial planning in the Medium Term Financial Strategy and any longer term planning. Due to the government’s focus on Brexit, the Fair Funding Review, planned to be implemented in 2020-21 has also slipped to 2021-22.
“Therefore, the likelihood and severity of the impact of the risk becoming manifest (e.g. TDC having to terminate services, make large-scale redundancies and/or be externally governed or managed) remains high, not only now but for the immediate future.
“The council has recently approved the 2020-21 budget, however the abstention of a significant number of members on the vote in itself demonstrates the difficult financial decisions that are to be made to ensure the council remains financially sound.”
A review of the council’s financial management will be conducted during this year.
Intervention
Technically councils cannot go bankrupt and are required by law to have balanced budgets. If this cannot be done a section 114 order can be issued banning bans new expenditure. Auditors can issue advisory warning notices to making cuts or savings, there could be intervention by the Secretary of State and local government reorganisation.
This year Northamptonshire County Council will be dissolved and two new unitary authorities formed after government intervention when the authority declared insolvency in 2018. Only Parliament can dissolve a local authority.
Other risk areas
Three other high risk areas for Thanet are covered in the report to councillors.
These are political stewardship, East Kent Housing and Brexit.
Mr Blundell says the continued lack of overall control by one political party at Thanet council means “there remain ongoing issues which could have a significant effect on the council,” although he adds “the council continues to pursue opportunities to support cross-party working.”
The risk associated with East Kent Housing comes as Thanet, and the three other east Kent councils, have opted to bring housing back under authority control following a series of major failings at EKH,
Brexit risks follow the UK withdrawal from the European Union on January 31, although there is a transition period until December 2020.
The report says: “The scale of its effect should not be underestimated and the council has identified a lead officer to lead on Brexit related issues and progressed contingency planning for a disorderly Brexit. The significant issues to consider are those concerning the strategic transport network, funding and the port. In addition, the council has identified a number of issues that could potentially impact the council’s ability to deliver its services.”
Making savings
Thanet council is due to make £730,000 of savings this year with measures including the scrapping of the Waste & Recycling Education Officer post and the Open Spaces supervisor post and a predicted increase in green waste collections and income of £208,000 from fees and charges.
Proposals for more shared services, including leadership teams, have also been made.
Other proposals include gaining income from a new authority housing company which would manage housing for market rent and installing new beach huts, again with rental income.
To help fund services TDC is increasing its element of council tax by £4.95 – equating to a weekly rise of around 10p for an average Band D property.
Thanet District Council receives 13p in every £1 of council tax. The remainder goes to: Kent County Council, Kent Police, Kent Police and Crime Commissioner, Kent Fire and Rescue Service and Town/Parish Councils.
There will also be a council property rent rise of an average £2.50pw per property.
Thanet council leader Cllr Rick Everitt said: “The risks highlighted in the council’s Corporate Risk Management quarterly update report have been raised in the last two reports which were published in September and July 2019. They specifically refer to the challenges posed as a result of the cuts in Government funding and are sadly not new issues.
“We have been very clear that the financial position of this council, and indeed all local authorities, has been significantly impacted by those cuts. We have also been frank about the need to continually review the way we do things as a result, to make sure we are working as efficiently and effectively as possible.
“I am proud of the way that we have responded to those challenges, achieving a balanced budget and setting out plans for the year ahead which mean that we continue to deliver the services that we know matter the most to our residents.
“These remain difficult times for all public services and we will continue to be transparent about the challenges we face. For the time being there are no plans for corporate wide restructuring and we are confident that the balanced budget passed by council on 6th February, will allow us to maintain the key services we provide to the public”.
Dont be upset people, it’s what you voted for.
We had all this reported in the news last year. However where’s the funding allocated towards the huge lorry Park in Manston gone? Quick enuff to pay for that… Don’t our Thanet gain something for that?, wasted council funds are somewhat to blame here preplanning the ongoing issues has not been carried out due to sackings, dismissals within the ranks at council. Making our local taxpayers pick up the shortfall is not an option here. Looks like we still have shady folk in charge.. Council letting off developers with structured social housing thus giving developers more profit while cutting allocated social housing directly suffers tells me all I need to know, someone’s getting pockets filled? Also what is our council doing about a huge fire of waste they have been storing in unsatisfactory buildings around thanet. Cost to authority on that fiasco has someone been responsible for that travesty who allowed it and why is it still allowed. Illegal storage of waste… Too many issues brexit.. I’ll scrape it off my shoe later. Let’s focus on stuff already wrong.
excuse me never voted for the officers of the council
like the planning department or the CEO who has paid out yet again money to a gas provider without the work being done
or the high salaries of the officers is what is crippling and then the expenses of the councilors of can apply for assistance to look after sick relatives when we have to pay for social services on top of social services
and they forgot to mention the running of the Port debt
the secret debt that they kept from us about who was being let off berthing fees and you stand no chance in tracing it back because I have tried but I cannot believe that councilors stand there and give us this shoddy service when they are the ones who made the debts
and with the closure of the stroke unit down to an ex leader of this council
It needs to be investigated to for fraud as overpayments were made to P and R of over £500k not authorised payments but the CEO knows as she is the one who draws the cheques and she needs tell the truth and stop sleeping around with another officer which she did not declare either but all the councilors are afraid
whistle blow if you are unhappy at TDC or you are a party to the fraud that has taken place with overpayments to Debra Upton and others and even paid themselves wages and pension
time for TDC and officers and council to be sacked with no pay
those boilers of people under an arms length company
where and still are council officers and councilors
shame on all of you because you have known this for years
like the ferry debt not being paid and then you had no insurance to make a claim
the continual lose of minutes or no minutes
shame and time to leave the council as in sack all of you
It cost me about £300 in buying 2 electric rads and extra on my electric due to having no heating for 3 months and no hot water for 4 weeks.
This was down to P& R , Now today 27/02/20 a new company GAS CALL meant to be coming to service my boiler /gas safety check, I was in all day, i not take my dog for a walk have a bath , normal things but they never came , looks like another bad company , at least both my heating and hot water is working.
I live in a council house and i am disabled
See wbo gets the big pay rises in the budget
I thought Brexit was supposed to be brilliant: seemingly not so, for Thanet at least.
I voted neither for Brexit nor this austerity-crazed government.
Good to see the figures. The major factor in TDC planning has been the collapse of funding from the Westminster government. Thanet appears to have LOST more than any other Council in Kent, even though we are one of the poorest areas.
You can’t achieve much if your funding keeps getting cut. You will certainly never please many local people.
How did the Tory government get away with this for so long?
Easy. Just get people to blame the Council itself rather than look at the bigger picture.
This strategy successfully saw off the UKIP amateurs who briefly rose to prominence.
It will make the current Labour leadership struggle as well.
Maybe the national Tories will reduce the money available so much, so the local services grind to a halt, so that the local voters, in despair at the worsening situation, decide to change things and ……vote the local Tories into power!!!
After all, it worked in the recent General Election!
Nobody mentioned the £50 odd million investments of the TDC?….
Sorry, just the Central Government making all Councils Bankrupt?….
Council Tax going up by 4% this coming year?….
“we’re doomed, we’re doomed”
Town Council ASP…. don’t delay anymore…. “get it done”….
This will affect the poorest & most vulnerable badly. We have had 10 years of Tories who have chosen to use austerity as an excuse to ensure life expectancy for this group declines. Why people vote for these self serving greedy snakes is beyond belief.
Wasting £2 million on white elephant thanet parkway station shows the why thanet council is not fit for purpose.
Well here we go again. Cutting back on more essential services for another increase in tax, instead of halting the £3 million waste on doing up the Council offices or buying new premises and of course the £2 million gift to pay towards a train station nobody needs. Get a grip TDC and start making the correct decisions, who the heck is running the authority as they are doing a terrible job?
Ironically a deficit budget and central govt intervention by auditors may the best outcome for this dysfunctional local authority . Perhaps then the our senior officers will be forced to stand down and perhaps our elected councillors will act with integrity and not out of self interest .perhaps then decisions will be made to rid us of the hedge fund stranglehold over Dreamland and TDC decisions .
Well said Barry, a new station is the last thing Thanet needs at the moment given all of the other issues it faces. TDC appears to be run largely by officers of limited ability whose key priority is self preservation, and they need to resign or be removed as soon as possible.
How did they agree a budget in February but in March there’s a shortfall? What is the finance director doing – navel gazing? Is anyone going to be held to account for the mess that is EKH? Money wasted on senior housing staff who are clueless running the housing service into the ground, let alone taking responsibility for house management. Why aren’t councillors doing their job and scrutinising what the council’s housing team actually do? Waste of public office the lot of them
This is very good news for the Tories, they don’t want children services / clean streets / parks and gardens / rubbish collection / street lights on in the dark / council’s making their district pleasant and nice to live in. No of course they don’t
The government wants to be grabbing more and more money from the plebs so they can give big tax cuts to the rich.
That’s what you voted for.
Lots of councils up and down the country with similar features to TDC have had their budgets slashed too. They are all getting on with it and haven’t descended to the shambles that is TDC.
The problem isn’t money. The problem is the lack of any sort of business acumen or strategic intelligence around their management team. None of them are fit for purpose and are playing a big part in making our local council a total laughing stock in the local government community. TDC have an industry reputation of being completely nuts and who on earth is going to share any new services with them?
As someone else commented, the best thing to happen would be external intervention to get things back on track and then get some senior management in who are actually capable of running a local authority rather than the current bunch who have been hopelessly promoted above their ability level and who appear to spend too much time fighting with each other and/or getting too friendly with each other instead of actually leading.
Precisely. A council of the amateur, inept, incapable. Who both past and current have managed (in the loosest sense) to make endless poor decisions, no one expects perfection , but the success : failure rate at TDC is hopeless.
Plus we have the people that live here, just look at the recent stories regarding refuse and dog waste, all costs a fortune to clear up behind the irresponsible.
East Kent Housing , going to cost millions, Dreamland a total basket case, Pleasurama, Ramsgate Harbour/port, list goes on.
“The Revenue Support Grant to Thanet from central government was £97,000 for the 2019-20 financial year. In 2018-19 it was £809,000 and in 2017-18 the grant stood at £1.446m. This is compared to £6.636m in 2013-14.”
Says it all.
If the government cuts Grant’s, and at the same time makes it almost impossible to increase the rates to make good, then you’ve got less money coming in, and less money going out.
I know the reaction of some people is to blame TDC and/or its councillors and/or its officers, but the stark fact is that this tory government has brought about this situation.
Thanet is not alone in this.
https://www.localgov.co.uk/Spending-Review-make-or-break-for-cash-strapped-councils-/46856
The financial figures you quote only tell half the story. Yes the main Support Grant has been cut but only because the Government have rolled out a new system at the same time which means the Council can keep a big proportion of the Business Rates they collect. To just quote one half of the new financial model is misleading to say the very least. As for quoting the news article, wouldn’t you expect any industry to be lobbying the government ahead of spending reviews or Budgets for more cash? It’s unlikely they would be issuing news releases saying we’re all OK thanks.
It’s also not the Government who have identified 700k worth of savings at TDC which, based on previous years’ experiences, will never actually get delivered which just makes the problem much worse for later years. That is down to the officers whether or not you want to admit it.
Do you mean to tell me that not only has the government cut support funding to local councils, but it also creams off a chunk of the business rates collected, too?
Given that a few years ago the support funding was more than £6M, what additional “funding” has the government given by reducing the amount of business rate they take?
For your information, in a democracy, it is the elected representatives who make policy, and the officers and civil servants who implement it.
Andrew, I can’t disagree with the theory you present about it being a democracy. The reality, however, is that TDC is an officer led Council. The Councillors go along with whatever the officers come up with which leads to the resulting shambles we have now. In a proper democracy it would work exactly how you describe but it certainly does not work like that in Thanet and hasn’t for a good many years.
But in past years the council has made decisions contrary to the officers’ sound advice, eg Pleasurama, allowing the Ramsgate-Ostend ferry firm to run up a huge debt and stopping live exports.
with councils being more and more cash strapped, it paramount that the money goes to causes in need. With that said how can our county council give £1.28 million to the turner centre ? a gallery that gets over 400,000 visits a year, with that footfall it should be self funding. 18 million on a train station, when we have more homeless people, low paid jobs, high private rent, lack of affordable housing, towns becoming no go areas at night, drug gangs doing as they please, lack of police, the list goes on. But on the plus side we will have a new train station in the middle of nowhere and a free art centre for the well of Londoners to visit.
Surely there are people from places other than London visiting the Turner? And I don’t believe that all its visitors are well-off. Is there a demographic survey of the Turner’s visitors which can be referred to by the general public?
I don,t get why the budget is only 17.1 million for the year , where is all our council tax going ? The whole system should be scrapped and you should pay only for what you use !
Thanet council get around 14p for every £ you pay in council tax. Ask KCC.
Your comment is naive beyond belief!
By sharing common infrastructure, we all benefit from huge savings.
For example, it wouldn’t bother me personally if the street lights were turned off over night. Why should I pay for them? I don’t use them.
But the driver of my early morning train, and the Baker of my breakfast loaf, they are up and about before first light, so they benefit from the street lights, and so do I, indirectly.
These cuts from central government are disgusting! We need all Thanet residents, TDC cllrs and officers and MPs to stand up against these cuts and say no more. We are fed up of being treated like absolute rubbish just because we are poorer than some other Kent Districts. No more. We need to be properly funded from central government.
Any money received through unique funds such as The Town Fund should add to our budget, not fill the gaps created by the government.
What do we pay our taxes for in Thanet. To be treated like second class citizens!!?
No more. We need social housing, nice shared accommodation for young people like student accommodation, assisted accommodation for the elderly that people can afford. Grass roots movements should help with this, not big developers from outside the area who want to build over our top quality agricultural land. We have enough empty buildings that we can convert. Then we need need excellent drug and alcohol services and youth services, training and education, rooting out the causes of vulnerability and deprivation. We need to look after our environment, but how can individuals do this when they are being stressed financially? The extreme poverty in the area must be erradictaed to allow these people to have dignity and reduce their stress levels.
Thanet is a wonderful area to live in, but you need basic money to live. We are not even being given the basics and this must stop now. Thanet residents of all political parties must get toghether to say that we will not accept this any longer!
If all those on here who think they can do better than councillors on Thanet district Council then why don’t they get out of the armchairs put down their laptops stop criticising and put them selves up to become councillors they Think they are experts on telling everyone else what to do let’s see what they can do. The main cause of councils having lack of funds is thanks to Thacther selling off council houses at less than half their true value robbing councils and local taxpayers of billions of pounds in lost rental income and assets. They were sold off to bribe the voters. Look back over the last 50 and you will find NOT ONE Conservative policy has been successful in the long-term and the Conservatives have wasted trillions of pounds of taxpayers money. Brexit will cost the UK trillions of pounds as well.
Unless Central Govt starts to support left behind communities via Councils or whatever, then the outlook for TDC is grim.
When Northamptonshire went down it sent shock waves into the system and behind the scenes the govt had to prop up services.It has been replaced with 2 clustered district sized unitaries who will face exactly the same problems with less resources. If TDC fails no one will notice, apart from Margate if they don’t have a Town Council and the bang will not even be heard in Westminster.
Our problem is do we let it happen or do we insist on an engineered scaling down of the business?
The options are let it go bang and have Govt commissioners running things, or dividing up the place between the other Districts or perhaps an East Kent unitary and devolved local councils.
Which would you prefer?
Whilst the failings of EKH is highlighted here there is no mention of other haemorrhaging of council tax payers money:-
2 million contribution for a Station nobody wants
2 million per year losses on a Port and Harbour Operation that a local Authority should not be involved with.
A very prominent Kent leader once told me, ‘TDC should not be trying to run a Port they should be concentrating on what they’re supposed to good at like collecting rubbish’