Kent and Hampshire County Councils warn of bankruptcy risk without urgent government action

KCC County Hall

Leaders at Kent County Council and Hampshire County Council have joined forces to call on the Prime Minister and Government to take urgent action over a looming financial crisis which could result in the authorities filing for bankruptcy within the year.

In a letter sent to the Prime Minister, Chancellor and Secretary of State, Hampshire County Council Leader, Councillor Rob Humby, and Kent County Council Leader, Councillor Roger Gough outline the drastic budget implications facing the two authorities, and the need for Government’s immediate help and a clear plan for long-term financial sustainability, if the two County Councils are to avoid filing bankruptcy notices.

Councillor Humby said: “Both Hampshire and Kent are high-performing, financially well-run and long respected County Councils. However, we face budget deficits over the next few years of a scale that has never been seen before – but not of our own doing.

“We have experienced more than 12 years of national austerity and cuts to our core budgets. Inflation continues to grow, along with demand for services such as social care for vulnerable adults and children. We are also constrained by outdated laws created in the 1940s and 1960s and have no autonomy to be able to introduce initiatives for some local services to help generate our own revenue.

“As a result, our budgets are now at breaking point. We have gone as far as we can to close the budget gaps we have faced to date, and there is nowhere left to go in future without severely impacting some of the most vulnerable people in our society.”

Kent County Council leader Roger Gough

Kent County Council Leader Roger Gough added: “The problem is simple, the extra money we can raise from council tax and business rates barely covers our normal costs of inflation each year. This leaves major growth, particularly in adults’ and children’s social care, totally unfunded.

“This is not a medium-term problem that can be fixed with more one-off handouts to keep the sector limping along, it needs fundamental changes to the whole system of local government funding. Without a major change either in the way these two services are funded, or in our legal obligations, I suspect that large parts of upper tier local government will face collapse.

“Our two authorities have consistently asked for the same things from Government over many years, to put us on a long-term sustainable financial footing. This includes more annual funding to keep up with growing demand for adults and children’s social care services or legislative changes to reduce the demands on these services; fully funding the social care funding reforms and more money for growth in special educational needs; as well as greater freedom and flexibility around setting our council tax and charging for services, alongside legislative changes to help local government help itself.

“We fully recognise the difficult national economic environment, but the time has come for urgent, meaningful dialogue with Ministers, our MPs and Government officials before the end of this year. We have a responsibility to the residents of Kent and Hampshire to do everything possible to protect the future of their important local services.”

The councils say no changes to current settlements over the spending review period, no Fair Funding Review and the lack of a new two-year deal for local government only increases concerns and the leaders say they “ fully expect to see more failures in the sector over the coming year, unless there is legislative change to revise our statutory obligations to match the reduced level of resources.”

In the letter they add that even with these drastic cuts to services, they do not believe they can close future budget gaps.

The 2023-24 budget at county council must be finalised by mid-December.

County Councillor Karen Constantine (Lab) said: “The Labour group have repeatedly warned Roger Gough and KCC of an unfolding crisis, which is due to Conservative Government policy. Indeed I have battled with them repeatedly to tackle the exponentially rise of child poverty in Thanet.

“Child poverty is wholly avoidable. Thanet children are equal to those in other parts of Kent. That in some Thanet wards child poverty is 50% is scandalous. That KCC have no cogent plans to tackle this is abhorrent.

“The Conservatives at KCC need to lobby their Government for a funding formula that matches budget to needs. Thanet needs a bigger slice of the funding pie.

“When – and if – they do this, we’ll know they are serious about looking after all of Kent residents. They have said and done nothing while this crisis has grown. The people of Thanet have been amongst the first to suffer under the weight of it.”


    • Bang on Steve, the Tory’s have always maintained they are the party for fiscal probity, yeah right! They use our tax money to give to their business friends, and share holders in privatised public services, like water companies! SWA its been reported have paid out £60 billion to their share holders since privatisation, instead of re-investing it to stop raw sewage being pumped into the sea! Isn’t the Free Market great?

  1. With people always voting Tory in Kent ,it’s like a turkey voting for Christmas,what do they expect (the voters ) ,always moaning about lack of pensions and underfunding of the NHS,but still vote tory,I rather abstain than do that ,or vote for a small party,,as a protest,at the moment nothing could get me to vote labour,with Corbyn type idiots in the party ,and don’t get started on Starmer

  2. Maybe it is time to review the salaries of KCC staff who receive over £100k a year,there are 36 of those! Maybe start with the Chief Executive Officer whose pay grade is in the range £220,000-£224,000.

  3. why beat about the bush , why dont they just say that our rates will be going up ,and that the public will pay for thier incompetence , we have a billionaire prime minister telling us we have to accept times will be hard = for who ???

  4. Kent tories are also guilty. Wasting money on paying consultants massive fees and spending money on vanity projects like thanet parkway railway station

  5. How many kcc wage earners are working from home ? they wont be missed in the office. Their offices can be let out to private cash investors.Time for some serious kcc management intervention.
    So disappointed with kcc !

  6. and these KCC Councillors will still be proudly wearing blue rosettes next May in the local elections ? Hypocrites.

  7. I think this is a plea by Hampshire + Kent to raise Council tax above 5% without a referendum.
    Next year’s council elections are going to be interesting if that idea is given wings by Central Govt.
    It is time the three tiers became 2 and Kent was broken into 2 possibly 3 unitary councils.I also think Kent fire and rescue and the local NHS should be melded into a single outfit, with local councils carrying out local activities, like looking after parks, small scale planning, sports facilities etc etc.
    Transport should be run by a regional body and funded like TFL,which is the bit you won’t like because it means motoring taking a hit, in return for better public transport, cycle schemes and walking routes.
    The black hole they have created is because Adult social care is in a mess.We need to build social sheltered housing and nursing homes.The private sector can be included but under strict profit guidelines.
    Many homes are of good quality, but some are not and there is not enough of them.I am concerned with some of the larger commercial companies running so many homes, and when they go bust catastrophe is the order of the day.
    Inheritance tax ought to be reformed based on the Dilnot principles, where everyone pays a %, instead of some walking off with huge capital sums and others losing everything to prop up adult social care, that’s not equitable.
    there is a lot of wealth located in family trusts, I think a whip round there ought not to hurt too much.
    Kent social care is a mess, and needs a Max Caller type commissioner to peer into its workings.

    • George Noakes is right that KCC needs to be broken into regional Unitary Authorities. Only then can the excessive KCC middle management excessives be culled by local voters.

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