County Council disputes claims it is teetering on the brink of bankruptcy

KCC County Hall

By Local Democracy Reporter Simon Finlay

Leaders at cash-strapped Kent County Council have disputed claims the authority is teetering on the brink of bankruptcy.

It was named as one of six councils facing going bust after the recent collapse of Birmingham City Council (BCC) with debts of £750m.

According to the i news website KCC, which must find savings of £86m next year, is vulnerable.

The i named Kent, Devon, Bradford, Guildford, Hastings and Southampton as all “fighting bankruptcy”.

But KCC sent out a robust defence of its position saying it is not about to  issue a Section 114 notice, which effectively means it cannot meet its financial obligations.

It said that there are a number of councils in formal talks with the government about issuing section 114 notices, but KCC is not among them.

The authority’s leader Roger Gough will be setting out plans next month for making efficiencies without dipping into reserves, a move regarded as the last resort.

‘Finances under enormous pressure’

But KCC stated: “We are 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.

“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.

“Our finances are under enormous pressure, as we endeavour to keep critical frontline services running in the face of sharply rising costs and increasing demand, particularly in social care.

“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 leader, his cabinet and senior officers at KCC are discussing urgent actions to address the budget overspend. 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 position as possible.”

Potential 114 notice

The i quoted from KCC auditors Grant Thornton’s report which said the authority must find £86m in savings.

Written by David Parsley, the report was published on the i website on September 10 under the headline “Six more councils fighting bankruptcy, including Bradford, Kent and Devon…”

It read: “In Kent, where 61 of the 81 county councillors are Conservatives, the authority’s external auditor has warned that it faces a potential 114 notice unless it makes savings of £86m by the end of its current financial year next March.

The report from Grant Thornton said Kent County Council was in a ‘perilous financial position’ due to inflation and a growing demand for its services. Kent council did not respond to i’s request for comment.”

Cllr David Brazier told today’s (Sept 13) scrutiny committee that if a Section 114 notice was to be issued, Government commissioners would have to step in and it would mean the end of discretionary spending.

He said: “It’s not a passport to the naughty step…There is a need for reality here and we need to control discretionary spending with a firm hand.”

‘Reserves are finite’

A well-placed KCC source told LDRS: “A section 114 is unlikely at the minute. Times are very hard at the moment and it is going to be tight – everyone knows that.”

But a senior backbencher said he believed the true situation is “far worse” than imagined and warned the council’s reserves are finite.

The member stated: “Once you start dipping into reserves, you have to have a plan to top them back up. 

“There are reserves plonked all over the place and not all of them are readily to hand. If you carry on dipping into reserves, they won’t last long. There has to be a plan. Even so, I feel that a section 114 is an inevitability, not a possibility.”

15 Comments

    • Not only ,art projects,but management,does the leader of KCC, really worth the wage.They state that the wages have to be compatible to other high earners,outside local government.And all,the other ,high earners ,with their secretaries,and expense accounts.

  1. Stop.paying for people to stay in hotels that game our system for financial gain and have never contributed to the system and cut foreign aid to countries that do not need it. This country is a soft touch and a laughing stock …

  2. There’s enough problems on earth . Look at Libya poor sods. There’s a lot of poverty in India I’m sure the Indian people are well impressed with there government. Whilst people starve.

  3. Thanet parkway might be popular if they build on manston . Also given the amount of homes being built around the haine rd a lot of people will probably have to commute.

  4. Pink Checksfield please don’t comment.All you are doing is amateurish rabble rousing.
    As for the stuff about art projects and management,it may make you happy,and somehow self justified,but does not solve the problems of the council.
    KCC’s problems started years ago.
    The Icelandic bank deposits,under financing expenditure for years,as others like Northamptonshire,E.Sussex,Surrey and other Tory councils with similar low tax policies did.Other failed investments, Barry Lewis’s vanity project allegations,are also partial causes,including funding Turner Contemporary for years.The various savage cutbacks only achieved short term relief, but only added to debt long term.However, the main culprits are 13 years of pointless austerity and a shambolic social services department.
    The Govt seems happy to see Europe’s largest Council to fail, with Birmingham blaming Labour,but others may fail soon and many will be Tory councils.KCC can stagger on for a short while by lopping off services,but they will not be able to carry on doing so,in a similar way to running down the reserves.
    By the time that KCC are due up for re-election,there may be a different brand of Govt unsympathetic to its cause.Having thrown Birmingham under a bus,there will be little mercy for KCC, and who could blame Labour for ‘restructuring’ a reactionary institution,in such circumstances.
    The best thing would be to breakup Kent into at least two unitary councils,East and West Kent.
    KCC and the District’s are overdue for reform,but most of all local govt needs to receive adequate finance.

    • How will splitting Kent into the affluent west and more deprived east, help? In my view, it will only make things worse for us here.

      • Exactly, Jane. John Nokes seems obsessed with my posts, but at least I get to the point instead of banging on incessantly like a pneumatic drill.

  5. The real issue isn’t KCC spending, it’s the cuts the government have been making to county and district councils since 2010 meaning they have 50% less money to spend on roads, schools, house building, homelessness, social services and education.

    Time to invest into public services, rather than making more cuts.

    Considering the billions of pounds of profits the energy companies are making, directly being extracted from tax payers pockets, why not look at taxing them properly and using that to fund local governments, and other public services.

  6. They could save such a lot of money by stopping all funding private businesses in Kent, stopping useless projects that cost millions of £££ that are not essential such as the waste of money on a pointless station in the middle of nowhere. Who is running KCC? Roger Gough should be ashamed he is not overseeing these wasted fund projects and putting a block on them. That money would be better used on services that are buckling.

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