County council told of likely tax and inflation hikes due to coronavirus impact

KCC County Hall

By Local Democracy Reporter Ciaran Duggan

Kent County Council’s (KCC) leader has warned about the “scarring” effect the impact of coronavirus will have on the county’s economy and local government.

Higher taxes and inflation will likely be imposed across the country in the “coming years” as the government tries to reduce the deficit and recover its national finances, Cllr Roger Gough (Con) and his cabinet were told in a virtual meeting yesterday.

Cash for local government is expected to remain “constrained” while Whitehall bosses are pushing to “integrate” council services as part of greater interventions into public policy.

KCC’s director of strategy, David Whittle, told the cabinet: “Whilst speculation is always a dangerous game in planning…there is an emerging consensus, becoming clearer, what type of operating environment local government might face.”

The public sector, including KCC, Medway Council and the 12 district authorities, will be expected to play a key role in revitalising the UK economy through the forecast imminent recession.

Challenges they will face include “balancing” their budgets, protecting frontline services and the long-term recovery of the economy.

Protecting vulnerable people, including domestic abuse victims and disabled residents, will remain a key KCC priority alongside supporting the local economy.

KCC’s leader said yesterday: “The scarring effects of Covid-19 on our economy, finances, services and organisational structures will be very significant.”

He added: “This changed operating environment will prove extremely challenging and will require changes to the KCC operating model.

“What kind of council we want to be in the future, what our priorities are and how we deliver our services and work with partners are all fundamental questions that only elected members can decide.”

KCC councillors will be expected to play a “stronger role” in policy development, with a transition roadmap laid out to a revised five-year plan by December 2021.

But opposition members have called for greater clarity on the role of councillors over the coming months.

KCC’s main opposition leader, Cllr Rob Bird (Lib Dem), said: “It’s not clear to me yet how KCC are going to involve councillors in determining, particularly the interim plan, which is going to be vital for the economy and social structures we have across the county.”

Margate county councillor Barry Lewis (Lab) said: “I’m very disappointed with the meeting because they seemed to be talking about a five-year plan when they haven’t even got a five day plan implemented.”

But, Cllr Gough said: “Recovery will not be a neat and linear process but it does present an opportunity to bring forward innovation and new thinking to many of the challenges we collectively face as a county and county council.”


  1. It looks like the Conservatives are getting their excuses in early! It has been completely predictable that they would use this economic crisis to push for more “austerity”, less money for public services, closures of the few Libraries that are left, reductions in subsidies for rural bus services, the final demise of youth services, provision of only minimal Planning and Legal Depts. so that building companies will get permission to build wherever they want and the local Council just won’t have the resources to challenge them.
    This is the same trick that they pulled after the 2008/9 Wall St crash.

    Can we not just accept that countries that print their own currency (eg the UK) CAN’T go bankrupt!? We wouldn’t allow ourselves to do that! We didn’t go bankrupt after the First and Second World Wars which cost far more to finance than the recent crises. We just payed off any debts over the long term and , if necessary, suspended payments during difficult years. That is what we did in 1934, telling American banks that there was an economic problem and we would not be paying for a while. They and the US government fumed but didn’t do anything.(Though I wonder if the American reluctance to join in the Second World War partly reflected their resentment about the money owed!)
    After 1945, despite the huge amounts owed for both World Wars, we created the NHS, built millions of new Council homes and created the Welfare State. I don’t recall much talk of “we can’t build any more hospitals. We’ll go bankrupt!”

    “Bankrupt” , the need to “save money” or “pay off our debts” are just Tory politicians talk to justify cutting back on things that benefit the population as a whole and diverting resources to the already wealthy.Unfortunately, they seem to get away with it.

    • Thanks Keefogs, absolutely agree, the nation’s economy is not like your family budget at all.But the Counties’ statements directly contradict present central government’s policy so far, no increase in taxes for local authorities and no extra central funding. Out of such contradictions come progress.

  2. I think we are in slightly different times than the financial crisis of 2008. The Conservatives successfully turned that into an idealogical attack on the public sector and gave them a perfect smokescreen to deliver huge budget cuts. The rhetoric stirred up in Tory supporting media about pay and pensions in the public sector did nothing to halt this.

    However, the goodwill created by the public sector’s response to Covid 19 will make it very difficult for any Government to do something similar. Imagine any Government now hitting funding to the NHS or schools for example given how they have kept things going during this.

    I think the long term response to this will be interesting but everyone is going to feel it quite substantially in their pockets. That’s for sure. I can’t see how we can possibly come out of this remaining a country of low taxation (in relation to others)

  3. Sue China for every penny spent by causing this World tragedy.
    Result: No higher Taxes on anything!
    My thoughts only….

  4. The conventional theory on money supply is that printing money increases inflation.The fiscal conservatives point to the Weimar republic and Zimbabwe (plus Brazil + Argentina).
    Unfortunately they are not good at understanding historical context.
    Austria + Weimar Germany were suffering from the effects of war inflation and perceived heavy reparation payments to the victors.They printed money and went into hyper inflation.Zimbabwe was/is a kleptocratic state as were the many authoritarian states in S.America.
    The UK is in the position of the ancien regime in France pre 1789, where the tax base bears heaviest on the middle income and the poor.
    We have also gone through a period of deflation and austerity and achieved only moderate results for all the pain.
    At the moment there is no inflation and there is a lack of aggregate demand.
    Things will not bounce back automatically and the invisible hand of commerce will not right the ship.It was very invisible during this crisis.
    What Cllr Gough and fiscal conservative friend and allies do not understand is that their nostrums will make things worse not better and that treating the UK economy as if it is the same as a household expenditure account is pure bunkum.
    Deflating in 1919-20 and again in 1925 when Winston Churchill as chancellor of the exchequer, put the UK back on the gold standard devastated the interwar economy.This time round we cannot reflate by rearming for war.
    KCC are out of touch, behind the curve and not fit for purpose.

  5. Sounds familiar, a conservative run authority getting their excuses in early. Standby everyone, they’ll come for your money and point you to covid 19. So, thanks to all you Tory idealogs we’re in for years of poor public services, wages, NHS, yes even NHS.

  6. Gough is really quite stupid as is Mr Whittle.

    I see no risk of inflation in the current environment. The reaction to this crisis will not be a spending boom when the crisis ends. People will be living in fear for their jobs. They will save. And the result could very easily be deflation risk, despite the significant government spending now taking place.

    But Gough and his bunch of illiterate financial people will hike their element of Council Tax to the max for no more reason than to create misery for those who will struggle long after the virus is nullified.

  7. These are not particularly stupid people but Tories, the elite which has ruled Kent for the last 150 years or so. The can only think with the ideology of the market, which is absolutely useless in the present crisis. What we need is public control of all available capital to be used for the good of all, by a government committed to all, nationally and locally.

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