Thanet council to discuss ‘difficult decisions’ over £3million budget shortfall

Councillor Rick Everitt says it is the first increase in a decade

Thanet council Cabinet members will discuss ‘difficult decisions’ that need to be made to plug budget gaps caused by the Covid pandemic.

The lockdown from March 23, combined with many people living on 80% wages through furlough and businesses attempting to exist on government grants and adapted business schemes, means the council has suffered financial losses in areas from parking fees to council tax and business rates.

Thanet council faces a loss of £5.5million for this financial year (2020/21) although £1.5million of government funding has been received and a further tranche of funding estimated at £1.1m will leave a budget gap of £3.05m.

Covid impact

Council losses are made up of £3 million from fees and charges -inclusive of £1 million is car parking fees – £1.5 million from Council Tax and Business Rates and £1 million of additional estimated expenditure.

Resources have also been used for the council’s community response to the crisis with a helpline and coordinating food deliveries to vulnerable people in partnership with established groups.

Cabinet members will discuss the use of council reserves to plug the current shortfall – although it is forecast that the district will see increased costs whilst also experiencing a loss of income.

Reserves at the 2019-20 year-end were £2million unallocated and £12.452million earmarked spending.


A report to councillors say the reserves are already low. However it also states: “The council is facing unprecedented challenges this year as a result of COVID-19.”

Losses include licensing income, on and off-street parking fees and planning fees. There has also been the need to spend more on agency staff for increased bin collections and additional £60,000 costs for PPE.

Reduced income of some £270,000 from the council owned car park at Dreamland is predicted.

The report says Government expects councils to meet the first 5% of losses in full, representing a ‘reasonable’ degree of volatility, and then will fund 75p in the pound of all losses beyond this.

However, current government guidance indicates that any losses incurred to the Council’s leisure services will not be covered as this is operated through a leisure trust. The report says: “This is a concern for the council and TDC will be lobbying the government for a change in position.”

Losses from the closure of Your Leisure services have been estimated at £160,000.

‘Freezing expenditure’

The report also says: “The size of the potential gap is so large that there is the possibility of a Section 114 notice – this is when the Section 151 Officer informs the council that it is going to run out of reserves, or that its expenditure plans exceed its income  and results in freezing expenditure.”

It adds: “The situation is still very difficult to assess and officers across the council have tried their best to arrive at reasonable estimates of additional expenditure and loss of income from sales, fees and charges. However, in some cases, the expenditure is still yet to be incurred, or the fees income is still yet to be lost. To manage this situation, it is proposed to immediately fund all expenditure incurred or committed by transferring reserves to appropriate budgets, but to hold in a ‘Covid-19 Shortfall’ reserve sufficient to cover expenditure and income losses from sales, fees and charges.”

A S114 notice effectively means a council is facing bankruptcy.

The report says: “The difficulty with removing £3.05m of reserves is that it will cancel projects and expose the council to financial risk.”

Spending plans ‘on hold’

Measures to deal with this could include moving plans to spend on large project back a year. These could include postponing payments on a TDC housing company (£1m), Parkway Station (£2m), Public Toilet refurbishment (£750k) and new Office Accommodation (£3m) to 2021/ 2022.

Leader of Thanet District Council, Cllr Rick Everitt said: “Our priority is to protect services and to continue to provide support for local residents and local businesses. We will have to make difficult decisions but every effort has been made to identify reserves that avoid a reduction in services or cuts to projects.

“As the report addresses one-off issues occurring this year, reserves would be used to fill the budget gap, rather than needing to use day to day services’ budgets. It will be necessary to replenish these reserves in the medium to longer term.”

The meetings will be held on July 30.

The full report has been published here


  1. Covid has really made the chickens come home to roost. For years TDC has built their annual budget on flimsy, fantasy levels of predicted savings that never materialise and ludicrous waste of money schemes like the cashless parking at Trinity Square.

    Every year they then make reference in their annual budget setting report about previous year savings never coming to fruition but then carrying on the charade into the next year.

    Covid has stopped all that. Now they have to face up to their fantasy approach to budgeting and will probably run out of money.

    It certainly won’t be the end of the world. Residents will get an external task force coming in to run the Council and we can wave goodbye to those at the top table who have dragged the Council into the financial and moral gutter.

  2. Council pay rises and £10,000 towards fighting the airport plans somehow shows how out classed the councillors are and indeed not fit to serve the community

    • T Tomlin. The £10,000 is from Ramsgate Town Council and the Council pay rises you refer to I think you will find are for Kent Council. However I totally agree with the thrust of your argument. I find it ridiculous that Thanet has 56 Councillors when neighbouring non unitary Authorities like Canterbury and Dover have far less and for example a London Borough with just over 300,000 residents has 63 Councillors. We certainly here in Thanet have a surfeit of Councillors at all levels from County to Town or Parish! Cull many of them they would not be missed!

      • TDC councillors get expenses of less than 5K a year though. You could get rid of half of them and it would make no effective difference to a budget shortfall of £3 million.

  3. TDC has some £40-£50 millions invested. This is to be used in extreme circumstances.
    Surely the situation we are now in, is to be considered extreme.
    I would ask Councillors to call in some of those monies, to cover present extreme circumstances.
    The sooner Margate becomes a Town Council, the better. Then we only need a financial wizard to run it.

  4. As the offices at Cecil Sq. Have been empty since March, as all the office staff went home, at he start of Covid-19. Then you can save the 3 million they wanted for a new offices. Also why hire in agency staff during the lockdown, when you have a office full of staff “working from home.” There is no shame in helping emptying bins and no council worker is above it. I understand they were not all watching This Morning everyday. But one day or two a week for each office worker, and a reduced cost for agency workers. Or have I missed something.

    • Most of the ‘working from home’ are doing 99% of their day job, if not more with the additional responsibilities handed over by the government, in more difficult circumstances. You’ll find very few are sitting there twiddling their thumbs, very little has stood still !

    • No TDC staff were furloughed. So although they weren’t in the office, they were all still working full time at their normal jobs which means the majority of staff couldn’t just go and help the refuse department. Some took on additional duties to help the vulnerable people as well.

      • Nik, can you honestly say that non of staff at Cecil Sq. could find a couple of days free in four months to help out. I did not see many cafes and bars having hygiene inspections. With very little building going on I can not see planning working full time. The tourist information must of been busy during lockdown. I am sure that some other departments that were not fully stretched. As another person stated for any election and count. Or when the Olympic flame came though Thanet in 2012.They seem to have a few spare days. So a few days helping out on the front line. Should not be out of the question.

  5. I understand that not all the council staff that are working from home are twiddling their thumbs, but surly the staff working in the Gateway, tourism, procurement, building control or food hygiene, legal, finance etc not to mention the CEO and Heads of services. Could have made it in once a week to lend a hand with the bins or litter picking.

    • I agree with Tony. Perhaps not all the staff have been left with little work but a good number would have been. Why weren’t they redeployed to litter picking, attending the toilets and patrolling the beaches ? After all, lots of them are very quick to ditch the day job on Election Day when they get paid their normal day rate plus more money for sitting in a polling station.

      • No-one was furloughed, everyone is working full time at home and more. People shouldn’t just presume staff are without work just because they aren’t in the office.

  6. All over the country the same arguments are raging. All the Councils are hard hit by the virus and the loss of revenue it entails. And all over the country Councils took on extra work to help feed and support residents who were self-isolating or who had suddenly found themselves without an income and nothing coming in as they fell through the ever-widening gaps in our benefits system.
    Unfortunately, all over the country people are looking for ways to just blame their own local Council. As if Thanet District Council is , somehow, uniquely responsible for the dire economic effects of the pandemic. Or as if TDC has been noticeably remiss in not predicting a pandemic of this scale. The fact is that NO Council has been left untouched , whether led by Labour or Tories or some coalition.
    Over the last few years , TDC has been led by a whole variety of political Parties or combinations of them.
    Unless there is something odd in the local atmosphere that affects the thinking of ALL political Parties, surely, we have to accept that there is no point in picking on any Party or individual as being responsible, and nor is there any point in grumbling about TDC in isolation when ALL Councils are being hit by the same factors and ALL are pleading for the government to bail them out. Thanet is not uniquely bad at anything!!

  7. Maybe not uniquely bad at any one thing ( though the ramsgate harbour railings planning farce must come close) but it certainly tries its best to make a mess of things,
    Abysmal phone and IT system
    Paying off successive chief execs (Samuels, Mcgonigal)
    Council leaders being put out to grass or prison (Hart , Ezekiel)
    The cost of the animal protests
    Failures in respect of social housing
    Inability to enforce within private rented sector
    The sagas around Pleasurama, Arlington house, dreamland

    The list really is endless.

    TDC are a joke have been for many years and my money is on them being so for a long time yet.

  8. And they want to try and stop the airport and build 2.500 by putting 10.000 of tax payers money into law suit what a joke

    • Errr you seem to be getting Ramsgate Town Council and Thanet District Council mixed up !! ?

  9. People need to understand the £3million is capital expenditure that will be depreciated over for example 25 years so £120,000 a year, and that won’t cover a huge budget deficit (and chances are it would be offset by a reduction in ongoing expenditure so could actually save money in the long run)

    • The Council also need to understand public perception. By that I mean, regardless of the correct accounting treatment of capital spend, the vast majority of residents aren’t accountants. They just see a figure of £3m being proposed at a time when the Council is teetering on going under. That influences public perception and, politically and symbolically, it would be a really good idea for TDC to drop this scheme entirely.

      It’s like a few years ago when TDC let huge debts build up before Transeuropa went under. Their response was that it wasn’t real money.

      Public perception is very important.

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