County Council faces biggest financial crisis in 131 year history

Financial news

By Local Democracy Reporter Ciaran Duggan

Kent County Council (KCC) faces the biggest financial crisis in its 131 year history, it has emerged.

Up to £130million of savings could be required at Maidstone County Hall over the next three years while council tax increases and major cuts to services could be considered by its 81 councillors in the coming weeks.

Cllr Peter Oakford (Con) KCC’s cabinet member for finance and deputy leader, said there would be no need to issue a bankruptcy notice “at this stage” during a virtual public meeting yesterday.

A KCC dossier published to the cabinet last week stated: “The 2021-22 budget could be the most challenging the council has ever faced, even more so than the most difficult years of austerity.”

Additionally, an extraordinary KCC full council meeting will be held on Thursday, September 10, as elected members seek to “fundamentally” review and recast the budget for the current financial year, 2020-21, originally decided back in February.

KCC opposition leader Martin Whybrow (Green) said the county council needs to review spending commitments made to large capital projects, such as £34m Thanet Parkway Station and £6.6bn Lower Thames Crossing, a proposed road link from Gravesend to Tilbury in Essex.

Calling for rapid decisions to be made by County Hall in the near future, he added: “KCC has chipped away and made savings year on year by whittling back office space, but the administration has often avoided making the big policy decisions. We need some sooner rather than later.”

KCC’s administration says it faces a cash shortfall of at least £50million over the next 12 months and continues to lobby Boris Johnson’s Government for financial aid. Whitehall says it intends to make an announcement on council finances in the near future, but specific details have not been revealed.

On Thursday, the County Councils Network stated that shire counties, including Kent, face an “unsustainable shortfall” of £2.5 billion between April 2021 and April 2022.

The Grant Thornton report, based on data provided by 39 county and unitary authorities, including KCC, shows that many face the prospect of “large scale reductions” in services to set budgets.

Yesterday, KCC’s cabinet was told about the bleak financial picture. The administration says it only has £40million of reserves to cope currently. KCC received £67m of Government funding in March and May, but says it needs much more to cover additional spending pledges and income losses from its £1bn budget.

KCC’s leader Roger Gough (Con), who chaired yesterday’s virtual cabinet meeting, said: “Some of the biggest uncertainties are related to the revenue position in the following financial year, particularly how council tax and business rates may feed through into our financial position for next year.”

Suggestions being put forward include increasing council tax. A KCC paper published last week states: “If the council tax referendum threshold were increased, and the council was willing to raise council tax, each 1% increase would reduce the gaps by £7m.”

Fears have also been expressed around the impact on the recovery phases of a potential Covid second wave.

KCC has recently faced backlash from some residents recently over a 4.2% pay rise awarded to its 81 elected members last week. This amounts to a £1.3million pay out for its council membership.

Ramsgate county councillor Karen Constantine (Lab) declined the £656 increase, saying it made her feel “uncomfortable” given the current economic climate.

On June 19, she said: “I could not in good conscience accept the pay increase and I shall continue to represent the residents here to the best of my ability.”


  1. A good start to reduce the KCC budget deficit would be to scrap the white elephant that is Thanet Parkway, a totally unnecessary extra station in Thanet and a complete waste of money. It would also free up the funds that TDC have allocated to this vanity project.

  2. The very first saving should be a reversal of the inflation busting and totally undeserves increases in allowances that the Councillors have just voted themselves . I know some have declined to take it , but instead of a 4.5% increase ,. a 25% minimum CUT in all expenses and payments should be forced on every single one of them.

  3. Crisis!!!
    Then how the heck can you justify a 4.2 % wage increase.
    That alone ploughed back into the funds would help surely.
    This is a farce, the county council must have known things weren’t looking great when they announced thier wage increase.
    It’s greed in its purest form
    Think all the county councillors and the district Councillor should lead by example and reject this increase to help out in the current situation

  4. Now can we finally scrap the idiotic idea of the Thanet Parkway? It’s not needed and a waste of public funds.

  5. Karen Constantine has done the right thing in refusing the pay increase – all other councillors should follow her lead. Otherwise they must accept the responsibility for taking money which should rightly go to public services which need to be preserved. There have been too many cuts since the Tories took power at Westminster in 2010, and the taxpayer and council taxpayer should not have to foot the bill for current government incompetence and negligence in the Coronavirus crisis.

  6. I have made the point before and I will make the point again . . .

    All these “hero” councillors may have now refused to accept their allowance increase or promised to give it to charity – BUT NONE OF THEM WERE BRAVE ENOUGH TO VOTE AGAINST IT IN THE FIRST PLACE.

    They all decided to become “conscientious objectors” and take the cowards way out by abstaining.

    • Could not agree more. I also see from KCC site that £15000 seems the allowance per councillor plus travel allowance. In addition they have £15000 each to give to good causes. Not a bad income for what and more than my state pension!!

  7. The financial black hole all the Councils are facing can’t be solved just by slicing little bits and pieces off the budget every year.

    This is the time to be bold and presenting plans to Government to split Kent into 3 or 4 unitary authorities. Do away with the current system of County Council, District Council, parish and Town councils. The saving in accommodation and officers who will no longer be needed will be huge. It will also give the taxpayer the advantage of seeing a load of highly paid deadwood leaving the organisations.

    In East Kent you could have Thanet, Dover, Folkestone and Hythe and possibly Canterbury all merged with KCC.

    • Afraid not Mr Blind. The savings would not be huge enough to restore the finances. All this was proposed in 1969 under the Redcliffe- Maud Cttee report. Kent would have been divided into 2.East and West Kent. Now you have Medway, so there would be a 3 way split. the border areas of Ashford and Swale would require dismemberment and this would cause resistance from them.
      Town + Parishes would remain as they do in Wiltshire, where Salisbury is a City Council with the same powers as Acol or Cliffsend.
      Some savings might be possible and certainly all the key services would be under one heading, but that would not solve the adult social care black hole.
      Yes devolution is a good idea, but not if you think it will save oodles of money, because it doesn’t. Devolution is a good idea to bring the governed and governors in closer proximity. It may mean a post code lottery of services, but in theory with the a responsive electoral system, you can kick the scoundrels out.
      As for deadwood, I suppose that’s anyone you disagree with, so that’s likely to be a big bonfire, but at least they will produce heat and light for a change.

  8. By my reckoning it would take a 19% + inflation increase just to put KCC back in the black. That’s not sustainable.
    As you say chopping off bits here and there such as Household waste recycling centres and libraries won’t do much, even though this administration dislikes them.
    Adult social care is the key issue and it must be faced. Freezing fuel duty, income tax, N.I, VAT and land taxes only means more austerity and less resilience for the next emergency, what ever that will be.
    The railway and road schemes won’t sort out the revenue problem as these come from capital, but if in doubt (and there is doubt) stop and review.
    It’s a bit like having a hole in your wallet with money spilling out everywhere and then deciding to buy a toilet green Lamborghini to impress the boss in Westminster.

  9. Scrap the pointless Thanet Parkway train station and you’ve solved a fair bit of that ‘black hole’ immediately. Surely that must be one of the easiest decisions in history?

  10. Here we go again! A major economic crisis hits the country from outside and there are immediate cries for austerity and cuts and “balancing the books” and “country going bankrupt” etc etc
    It was the same in 2007/2008 after the Wall St crash crossed the Atlantic.
    It gave the Tories the opportunity to speed up the process of reducing living standards for most while enhancing the incomes of the few at the top.
    We should not forget that, while we were suffering the effects of austerity, which led to an under resourced NHS, unable to cope with Covid19, the well-off actually increased their income.
    The same is being arranged now, using Covid expenditure as the excuse. They said that there is “no money tree” but there IS. Borrowing rates are at rock-bottom. The country prints it’s own currency and there is no-one who can declare Britain “bankrupt” as this country is just too big. We are not like Greece, with only 9 million citizens and a tiny economy to match. The European Central Bank was easily able to bully Greece into self-destructive sell-offs of state assets. But Britain doesn’t have many state assets left to sell off except the NHS.
    We payed for the First and Second World Wars by repaying small amounts over 90 years. Given the low interest rates , and the fact that, in effect, we are borrowing off ourselves,it won’t take anything like that length of time to pay off the much smaller amounts required to cope with Covid.

    Talk of “financial crisis” is a political ploy to strip away our last publicly-owned services and facilities. Libraries will be gone.
    Care Homes will remain in mostly private hands and the taxpayer and the residents will be forced to pay excessive amounts into the bank accounts of the owners. The NHS is still “on the table” in trade negotiations with the USA. It is being progressively underfunded while private contractors take more and more medical services.
    The bulk of billions of pounds of taxpayers money, spent on Covid 19 tasks, has gone to private companies , even though the NHS is already geared-up to meet the requirements IF it was funded with even half of the cash being splashed at Serco and the rest.
    While we in the country are preoccupied with our safety , the government has seized the opportunity to use more taxpayers money to enrich the owners of private firms.
    When money is being directed to private businessmen, there’s no problem.
    But when the public wants to protect our own services and standard of living , it will be “Sorry, we need to save money There’s no magic money tree, you know.”

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