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 We are also constrained by outdated laws created in the 1940s and 1960s and have no autonomy to be able to introduce initiatives for some local services to help generate our own revenue.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 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.”
