Kent County Council budget: Hundreds of jobs set to go as authority fears ‘absolutely disastrous’ future could be on horizon
06:00 13 October 2016
Council chiefs are outlining plans to slash £108m from its budget in an attempt to balance the books
The future for local authorities could look “absolutely disastrous” if better deals aren’t negotiated with central government, a council chief has warned.
Kent County Council this week outlined plans to slash £108m from its budget in an attempt to balance the books, which would see up to 400 jobs go across all of the county’s services, except in schools.
Council tax will also rise to the maximum amount before triggering a local referendum.
While not all of these will be compulsory redundancies, it is another indication of the dire straits KCC finds itself in, as corporate director of finance and procurement Andy Wood, and cabinet member John Simmonds, told KoS of the lack of understanding from central government of the immense pressure put on councils across the country.
With funding in the form of the Revenue Support Grant (RSG) being slowly reduced year-on-year until it dries up completely in 2020, councils are having to become self-sufficient, though plans are in place to allow them to fully retain business rates - a major source of income, but one complicated by businesses appealing the rateable value of their properties, often leading to smaller returns.
Mr Wood believes a proposed deal to make authorities responsible for attendance allowance benefits, primarily aimed at those aged over 65 which helps to pay care costs, and currently awarded by the Department for Work and Pensions, could be the final nail in the coffin if other support is not made available.
“Attendance allowance and business rates don’t go hand-in-hand, but that’s one of the options they’re talking about.” he said.
“We get no policy decision making over attendance allowance, so if Brexit has the downside that some people say, and business rates start to drop, attendance allowance is only going one way, because it’s pretty much based on the number of older people in your county.
“If all of our RSG disappears, and we get given new responsibilities that are going to add a cost pressure, and the means of funding and business rates start to drop, that’s when it could be absolutely disastrous for local government.
“That’s what we’re desperately trying to have an influence on to ensure that doesn’t happen.
“We’ve been really good at guessing [the level of funding through government grants] until last year, which was the most seismic shock across local government.
“When they announced the figures everyone thought they’d missed something, it couldn’t be real, and there was widespread panic - our cut was about £14m worse than we thought
“When you look at the last six years, living on less money as local government has to do, and you’ve had to explore every corner of the services you provide and when you’re looking at every corner of every service it’s really hard work.
“A huge amount of effort has gone into what I think is a very successful period where we haven’t had to say to people ‘we can’t give you homecare any more, we’re not going to take your kids to school on the bus’ and the vulnerable have been protected.
“We don’t think [the government] fully recognises the pressures we face - if we just take National Living Wage, the impact that’s had on us in terms of price increases with all of our providers, it’s tens of millions.”
For the fourth consecutive year, the authority is proposing an increase in council tax of 1.99 per cent plus an additional two per cent social care precept, first introduced by then-chancellor George Osborne last year.
This would mean the KCC precept on a Band C property increasing from £1,007.60 to £1,047.84 - a rise of around 80p per week for residents, but worth a collective total of £23.7m to the council in terms of helping balance the books.
Mr Wood said: “Nobody puts council tax up lightly, but on that balance what would you do? Ask people to pay 80p a week more or find £24m elsewhere? It’s really difficult to find that balance.
“If you could get to people and explain what paying another 80p a week would mean versus what would have to happen if you didn’t, I think people would vote for an increase, but you can’t get to 600,000 households and explain it.”
Adult social care is proving a particular strain on resources, with an increase in demand and cost of services outweighing savings of £13.3m KCC intends to make.
Council chiefs say there has been no indication so far that social care funding through the two per cent precept would disappear and admitted their ideal early Christmas present when Philip Hammond presents his Autumn Statement on November 23 would be bringing forward the Better Care Fund [a pot of cash originally designated for health that can be used for social care].
“That fund is going to bring us in £17m in 2018/19 and £33m the following year,” Mr Wood said.
“We’ve asked if they can bring that forward because we can’t wait another 18 months for that extra funding to become available.
“We’re hoping it comes with no strings and we believe it’s a genuine attempt to recognise that if social care can’t be properly delivered, the impact on health is enormous, and vice-versa.
“At the moment, that isn’t as seamless as it should be.
“This fund, if we had that now, we could start to deal with some of the pressures we’re facing because if you keep taking £80m out every year for six years, there is a limit somewhere and we’re getting really close to it.
“If we hadn’t started transformation plans and programmes three or four years ago, we’d be where Lancashire and Northamptonshire are now and that’s hitting a brick wall with nowhere to go, having to rely on two years of reserves.
“Unless they do something drastic they’re in serious trouble, and we don’t want to be in that position.”
KCC leader Paul Carter added: “We started this journey to save hundreds of millions of pounds in 2010 and, by managing this sensibly, we have already saved more than half a billion pounds over the past six years.
“The government has placed an emormous challenge on us by imposing on local government some of the biggest cuts compared to other parts of the public sector.
“With forward planning and facing the challenge early on we are now in a better position than most.
“We totally understand that some transformational plans take many years to implement.
“We are forward-thinking, have made intelligent commissioning decisions and have the situation in hand.
“Despite these huge challenges, we are determined to continue to make Kent a great place to live and work, seeing the population grow and attracting new businesses.”
Gordon Cowan, Labour leader on KCC, told us he shared Mr Wood’s fears of what could happen to councils in the coming years.
“By 2020, it is my view that we will be waiting for the first local authority to go to the wall.
“It will happen because there is just no light at the end of the tunnel.
“While its true on paper that the local Conservative administration have not yet cut any frontline services, I think they soon will.”
Ukip leader Roger Latchford was unavailable for comment.
A consultation has been launched to gauge public views ahead of the Autumn Statement, and a meeting of the full council next Thursday, where the plans will be discussed further.
Details of the consultation and how to take part can be found at www.kent.gov.uk/budget