Unexpected increase in government funding plugs predicted shortfall in Thanet council’s 2022/23 budget

Thanet council

Thanet council Cabinet members will discuss budget proposals for 2022/23 which includes deleting the deputy chief executive post -vacant since former deputy Tim Willis departed the authority last October with £280,000 severance pay – and one compulsory redundancy from the Kent Innovation Centre.

An increase of government funding for the year means there is no longer a budget deficit of £691,000 which had been predicted in November.

Net service spending is increasing by £1.182m to £17.902m, which is a 7% increase on the £16.7m budget last year. This has been partly due to an unexpected increase in Government funding, including a £525k New Homes Bonus allocation and £325k from a new Services Grant.

The budget funds all services the council provides to residents, communities and businesses throughout the year.

The latest published report is part of the council’s annual budget setting process and follows Cabinet approval of the Budget Strategy report on Thursday, November 18. The report covers next year’s budget and the Medium Term Financial Strategy 2022-26. It includes more resources for local services, a review of the council’s reserves and the proposed increase in council tax for next year. It also highlights the savings made in order to protect key services.

Savings and income

Despite the increase in funding, savings have still been needed to balance the budget.

These include the compulsory redundancy, deleting several vacant posts and service restructures.

There will also be additional income by increasing the Thanet council element of residents’ Council Tax – equivalent to £4.99 per year on a Band D property. And a rise in fees and charges of 3% where regulations allow.

A suggestion has also been made to use the council’s Minor Works team to generate income from selling handyperson services.

Extra costs and surging homelessness

Costs in the coming financial year include £360k for two additional waste collection rounds. This is currently in operation during 2021-22, but staffed using agency workers and reported as an overspend. The additional rounds are needed as more waste is being generated as a result of people working from and spending more time at home.

There is also an anticipated rise in temporary accommodation costs of some £400k.

A report to Cabinet members says: “Homelessness has grown as a challenge for many local authorities over the last year, Thanet included. There are additional pressures on Housing Services as the gap between supply and demand increases and previously plans have been developed to ensure that this pressure is minimised.

“The council has reviewed and is delivering its homelessness strategy action plan, is regularly monitoring the levels of homelessness and has commissioned new services to address the increasing need for support. This work will continue. The council has also successfully bid for new government funding to support homelessness services locally.

“However, the council is seeing another surge of homelessness across the district as a result of Covid and in addition the eviction ban that came to an end on 1 June has added additional service and financial pressures.”

A further £160k will be used to once again help fund Your Leisure – which runs Margate Winter Gardens, Theatre Royal and leisure centres – as it continues to struggle from the effects of the pandemic.

Bookings are scheduled to pause at both Margate entertainment venues, with operator Your Leisure’s annual rolling lease at Theatre Royal ceasing on 28 April 2022 and a halt in Winter Gardens bookings from August 14, 2022, although Your Leisure retains its lease which runs until 2024.

The report says challenging times still lie ahead, especially due to the renewed concerns and impacts of COVID-19.

Reserves and staff pay

The council also plans to replenish reserves by making a £180k contribution for 2022-23. Reserves refer to money the council holds back to fund specific projects or for emergencies.

A 2% pay award increase for council staff has been built into the budget, which factors in a requirement to increase wages for staff on the council’s lowest grades. This also includes a 6.6% increase to honour the National Living Wage requirements set out by the Government.

Cllr David Saunders, Cabinet Member for Finance at Thanet District Council, said: “These reports illustrate the difficulty that we have when planning our finances against changing scenarios. Just a few months back we were forecasting a significant budget gap, but with a planned and cautious approach, combined with an efficient savings plan, we have been able to balance our budget.

“Despite what may seem like a lengthy and complicated process comprising several reports, this level of planning is of critical importance. It’s how we continue to deliver the services that matter to people and protect and support our most vulnerable residents. Planning our finances in this way means we are on the right track for balancing our budget in the coming years.

“We understand that some of the tough decisions we have made come at a time when many residents and local businesses have been impacted significantly by the pandemic and support is available for the hardest hit.”

If approved by Cabinet, the report goes to the Overview and Scrutiny Panel the following week and then back to Cabinet the week after (if the Panel makes any recommendations) before going to Full Council for approval in February.

The money the council uses to fund public services is made up of Council Tax receipts, income generation including from fees and charges, retained Business Rates and any Government funding.

Thanet council receives just 12p in every £1 of Council Tax. The remainder goes to Kent County Council; Kent Police and Crime Commissioner; Kent Fire and Rescue Service and Town/Parish councils.

The Cabinet meeting takes place on January 13 at 7pm. The meeting will be live-streamed.

16 Comments

  1. The council say they need to make two additional collection rounds due to “home working” no mention of the additional income in council tax from all the new houses being built. Also if businesses and government want staff to work from home the business the person works for and the government should make a contribution towards making an extra payment on top of the residential paying of council tax because to all intents the home is also being used as a business.as well as residential dwelling.

  2. Repairing the lifts will be well behind the staff pay rise and the best part of £1m for the TDC senior Exec “back stabbing fund” which has to be paid for.

  3. Expect a 3 percent increase in council tax due to tory run kent county council next April while cutting many services. Austerity is still with us.

  4. Yes Tom they have been doing that for years, they get elected on lies and making false claims of what they will do and won’t do then once in office they cut spending on all public services they break all the promises they made and divert their attention to making their rich friends richer so at a later date their rich friends will return the favour and give them a good well paid job of £100,000 per year working for half hour a month with half hour tea break. As the term of office nears to an end they start giving out the money they should have given out 5 years earlier so the mugs who voted for them can be mugs again and so it goes on.

  5. £280,000 severance pay for Tim Willis. Thank you property tax payers of Thanet for your generous gift. You had a choice pay for 2 properties to house families on the waiting list or help pay off the mortgage. You chose the latter.

  6. Why is TDC only getting 12% of our Council tax? I’d have thought 25% would be more realistic but in the meantime, can we not get it raised to 15%???
    What does it take to change things? KCC aren’t going to happily give away money, but it must be possible to improve Thanet’s share. How?

    • Easy one! Just join up like minded neighbouring councils and become a unitary authority. Doing this will cut out KCC completely

  7. “Hay Gordon” is quite correct. A unitary authority is an excellent idea. Much more accountable and avoids expensive duplication.

  8. TDC may have a balanced budget but it remains dysfunctional from the top. The years of decline will simply continue until and unless our councillors take action together against the rot that daily turns our public assets into liabilities. The conscious dismissal of experienced line managers from most departments, craftsmen who maintained equipment, gardeners who maintained our open spaces and so on, have all led to the decay we see around us. Central government funding may be less than it needs to be, but our assets should be earning their keep, either providing service to the community that it would otherwise have to pay for, or earning revenue for TDC to cover maintenance and help fill the funding gap. Instead we have an executive at war with itself, determined to individually extract the maximum personal remuneration they can. Watching even our new cabinet in action, reflects a disrespect for each other that is destructive and unacceptable. This is an appeal to those councillors who do not genuinely have the interests of the Thanet community, ahead of their own, to please step aside so that your place can be taken by people who sense the urgency and need to work closely together, to achieve the professional and caring prosperity that is so long overdue here. There is also a strong case for becoming a unitary authority and asset disposals should immediately cease.

  9. It is not uncommon for councils to realise that, with the advent of homeworking and a greater concentration of regional resources, their premises have acreage of office space going spare. It has been suggested that a floor or two of Cecil Street could be ‘repurposed’ for ‘creatives’ in line with the overall strategy. The rental income thus generated would support an increase in the Regeneration facility which is badly understaffed – we rather need a Fundraising Officer to work with the community to take advantage of the continual outflow of central funds – especially since ‘Levelling Up’ is bound to be the major pitch (from all parties) in readiness for the next General Election.
    And one rather wistfully wonders how many cleaning operatives could have been funded by the three-quarters of a million squandered prospectively on employment tribunal litigation ? Doubtless this ‘oppoirtunity cost’ will feature in the forthcoming In dependent Report.

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