County Council says it is not on brink of bankruptcy but ‘urgent savings’ must be made

Kent County Council leader Roger Gough

Kent County Council (KCC) leader Roger Gough says measures being taken to manage severe budget pressures mean the authority is not one of those forced to have formal talks with the government to start the process of issuing a ‘bankruptcy’ notice – but service cuts will have to be made.

S114 notices are issued when an authority cannot produce a balanced budget – so technically faces bankruptcy – and results in a ban on all new spending with the exception of protecting vulnerable people and statutory services and pre-existing commitments.

Last November a letter was sent to the Prime Minister, Chancellor and Secretary of State, by Hampshire County Council Leader, Councillor Rob Humby, and Kent County Council Leader, Councillor Roger Gough outlining 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 were to avoid filing bankruptcy notices.

Cutting costs

However Cllr Gough says management actions can reduce some of the budget shortfall

A report to Cabinet members, who will meet on Thursday (August 17), says the first revenue out-turn forecast for 2023-24  is of a projected overspend of £43.7m. The report also sets out initial management actions which will reduce the shortfall to £26.7m by cutting £10m from adult social care and £7m from capital programme financing.

The projected overspend comes on top of the £47.1m shortfall in 2022-23 which has already reduced the council’s  reserves.

Kent County Council says it is facing an enormous rise in the cost of services, fuelled by inflation, market conditions and additional demands on its services from population demographic changes and complexity of need.

The most significant pressures over the last two years are in adult social care and children’s services, totalling £24.5m and £33.7m respectively. This year there are forecast overspends in Children’s, Young People and Education totalling £28.4m, and in Adult Social Care & Health totalling £25.8m, reducing to £15.8m following initial management action.

The largest adult care costs were on residential and nursing care for older persons due to a combination of market conditions and increasing client complexity. A significant increase in the use of short-term beds was also a major contributory factor.

There were also significant overspends for clients with mental health needs, learning disability and physical disability.

In children’s services the most significant overspends were on home to school transport and placement costs for children in care. In both cases these arose from increases in numbers of children being supported and increased operator costs.

In the 2022-23 financial year KCC had to spend its risk reserve of £25m with the remaining £22.1m being drawn down from the General Fund reserve.

Budget recovery plan

KCC says the priority is to deliver a budget recovery plan that secures Kent’s future, restoring and improving financial resilience. The budget recovery plan sets out immediate actions to reduce spending in the short term, as well as structural changes over the medium to long term to ensure the authority’s spending is sustainable and within the resources available from central government and council tax revenue.

The council says it will need to focus on the most essential activities and priorities until the financial position is brought under control.

This will include a review of all directorates, in particular Adult Social Care and Childrens’ Services, to make sure savings and efficiency plans are delivered.

Commissioned services will be under threat, including youth services from providers other than KCC.

Cllr Gough said: “ KCC is, like many councils across the UK, dealing with an extremely concerning financial position. However, I am confident that we can find solutions, make the necessary savings and, most importantly, secure Kent’s future.

“We are leaving no stone unturned and remain confident that we can identify and deliver these savings and ensure that KCC continues to be a sustainable local authority that delivers for Kent residents.

“Our finances are under enormous pressure, as we endeavour to keep critical frontline services running in the face of these sharply rising costs and increasing demand. We need to make urgent savings in the remainder of this financial year from spending reductions and increased income, in order to ensure that we balance the budget, without the reliance on reserves. The report published today represents the first stage of this process.

“However, our message to central government, and to our residents, is clear. Our funding is going up by less than inflation, ultimately making extremely tough savings decisions not only inevitable but urgent.”

Progress report

A progress report will be presented at a meeting of Cabinet on October 5, which will set out in more detail additional actions and decisions needed to bring the forecast overspend down to as close to a balanced budget as possible. Between now and October the Leader of KCC and his new Cabinet will be taking urgent decisions to address the budget overspend.

Cllr Gough added: “I am all too aware that a number of local authorities in the UK are in formal talks with the Department of Levelling Up, Housing and Communities (DLUHC) to start the process of issuing an S114 notice.

“KCC is not one of those local authorities that is having those conversations with central government, and we remain confident that we will not have to.”

‘Russian roulette’

County Councillor for Ramsgate, Karen Constantine, said: “I joined Kent County Council in 2017. Since then I have watched while the Tories have essentially played Russian roulette with people’s lives. The cuts to funding by Central Government been felt particularly hard in Thanet, especially in the poorer wards where many people have been struggling with the cost of living crisis for many years.

“The Institute for Government say, ‘The fall in spending power is largely because of reductions in central government grants. These grants were cut 40% in real terms between 2009/10 and 2019/20, from £46.5bn to £28.0bn (2023/24 prices).’

“The funding crisis is absolutely the responsibility and the intention of the Conservative party. They have stripped funding in the ideological driven belief that councils of all types and sizes can make money off residents to meet the gap in funding. Above and beyond the council tax they already collect.

“Labour councillors have repeatedly told them this formula does not work and that Central Government funding needs to be restored urgently. And that it should be restored in such a way that funding meets actual need. They continue to fail to do this and they should be held responsible for their failure to tackle the spiralling rise in poverty the rising tide of inequality.

“The upshot of this is that people suffer unnecessarily and we are seeing that with the elderly and children in particular; the so called safety net is full of holes. People are falling through.

“By failing to effectively challenge their own Government, KCC are playing fast and loose with people’s lives.”

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  1. 20+ million spent on Thanet Parkway would be a welcome input in order not to slash much needed services.

  2. Cut pay for top officials and cut the grants to the arts.Let the arts ,stand on their on two feet,as the saying goes.What other sector of the entertainment/media ,gets funding ,like the arts.I am sure someone on this site knows,because I cannot understand how they keep getting the grants.And yes I know they apply for them ,before any remarks

  3. Faced with a budget overspend of in excess of £43 million and yet KCC went ahead with a new station in Thanet, Parkway which was totally unnecessary and not wanted by those who actually live and work here but it cost KCC many millions they clearly did not have. They really have no idea at all, they are financially incompetent and they should be thrown out at the next election.

  4. Austerity cut this cut that run public services into the ground tax’s higher than they have ever been ( only for those on PAYE)
    Less than useless KCC more less than useless government jokers.
    Thatchers / Major / Osborn and Cameron / May / Johnson / flash in the pan Queszi and Truss / elected risky Ricky. Who voted for this absolute shambles of Conservative leaders. Their OWN members have Broken Britain by choosing these as their “ leader”
    With the exception of Sunak who is an imposter no one me voted for him. In the name of the Father the Son and the Holy Ghost please God call a general election so another party can take over and try and mend the damage the above idiots have caused our nation.

      • Why should Bill mention Labour prime ministers when the Tories have been in government for more than ten years?

        • Because Blair and Brown sowed the seeds of many of the issues we face today, regrettably none of the PM’s that proceeded them got to grips with the damage these two did. Still I’m not going to waste my time on here with the leftwing or so called progressive cheerleaders that mostly inhabit these threads.

    • Very well said Bill, however as it stands at the moment that only leaves Left wing Labour? Which means we are all totally ?

      • Starmer is another conservative lite, and Phony Blur Edward, I am abstaining at the next election, don’t want to see my vote wasted by voting labour!

  5. Thanet business man, ( self titled) do your research before taking rubbish on here. You bang on about a much needed soon AIRPORT station yet £6 million A DAY is spent on hotels.

    • Lol oh Bill you are very quick to tell people who do t agree with you to get their facts right.
      You said the same to me in the ‘ramsgate empty shops’ thread the other day.

      I asked you to prove us with the facts which I have just checked you still havent proved your facts.

      Its abit rich asking others to get their facts right when you are unwilling to do so yourself

    • Bill
      You said you knew everyone who runs manston but you chose not to back it up with the fact. The facts you said I had wrong regarding no infrastructure, no fuel grid, going bust every time.

      You choose not to give your facts lol after saying I had my facts wrong. Typical pro manston demise anyone who doesnt agree with you and than fail to offer proof my facts are wrong lol

  6. But Bill, correct me if I wrong, but when the last Labour government left office they gloated and said ” There’s nothing left ” So basically the next government, whoever, the electorate voted for would have been left in the S..T. Some people have selective memories.

  7. Well said Laurence. Let’s also not forget that Karen Constantine the labour councillor complaining about council costs is also the one advocating for yet more illegal immigrants to be allowed to stay in this country and given homes and claim welfare benefits, she wants increased benefits for the unemployed and higher wages for council and government employees coming at a cost to local councils and tax payers. If things are bad now just wait till the far left are left in charge of the purse strings

    • Legal migrant’s actually… There is plenty of robust evidence to show that migrants add more to the economy than they take. There is a shortage of workers. There is also a moral duty to assist others in need. The U.K. has always done that.

  8. “There were also significant overspends for clients with mental health needs, learning disability and physical disability.” There is NO overspend on mental health, learning disability and physical disability. Not enough is spent on the contrary. Perhaps the money is not allocated in the right way, but please KCC, don’t say too much is spent, even if the budget allocated less funds. And cut money spent on vanity projects rather than on the mentally ill and the disabled!!!

  9. Yet we are paying for record amounts of people to come in to Kent illegally who have never contributed to the system, that would be a start …

  10. Tony Blair and Gordon Brown may be guilty of many errors, but not for the current multi crisis.The culpability for that falls on the current administration.
    Brexit has not helped our cause, and while Starmer may be quiet on the subject, I fully expect the UK to enter some kind of a closer economic arrangement, probably a customs union by rejoining EFTA or by some other means.The Glorious revolution of 2016, has not worked out at all well, but we can still remain independent but joined up where it matters.
    As for the migrants, they are not illegal, for all the guff coming from braverman and the Daily Mail, their status is yet to be determined.It’s the time it is taking to determine their status that is causing the problems. The Home office is not fit for purpose, which brings me to KCC.
    not fit for purpose is the statement I would make regarding that organisation.
    It is all very well for Roger Gough to say that cuts have to be made, but where?
    If you cut much further, there will be nothing worth saving, and if that is the case, the public may well conclude that paying council tax is not worth doing, as KCC do not do anything.
    Does Roger Gough really think that the public will continue to pay council tax merely to keep an inefficient social services administration in funds?
    the public wants to see more bus services, better maintained roads,youth centres open, and the network of local refuse collection centres open.That is not much to ask. Failure to maintain these services means an end to KCC. Your choice Roger.

    • Because you would not be able to claim that you are a victim of human trafficking if you brought a proper ticket and if you destroy all of your documents you can claim that you are fleeing a war torn country of your choice.

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