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.”