Kent County Council has today (Thursday) agreed its budget for 2016/17.
It was described by Kent County Council Leader Paul Carter at today’s meeting as “without a shadow of a doubt the most difficult it has ever had to face”.
Mr Carter said: “I think we’ve put out an intelligent budget. Government grants to support local government services have reduced dramatically.
“This county council budget four years ago was in excess of £1.1 billion, which will now shortly reduce to £890 million.
“This represents over a £200 million reduction – some 20% of our budget – whilst at the same time containing demand pressures on our services, predominantly beyond our control, amounting to some £230 million.
“And incredibly with no substantive service reductions and indeed in many cases, improving the quality of our services with £430 million savings delivered.
“It is regrettable that we have to put council tax up but we have no choice. It is, however, essential if we are to maintain frontline services.”
The council’s most significant pressures include an extra £31 million to cover additional demand and increased costs for adult social care.
A further £12 million is needed to meet the additional demand for services such as waste disposal and special education needs transport.
KCC also has additional costs of £13 million as a result of changes in government legislation, such as increases in employer’s National Insurance contributions and the impact of the National Living Wage.
Members agreed to a 1.99% increase in council tax.
This will see the KCC element of the charge on a Band C property go from £966.88 to £988.24 and bring in an additional £11m towards spending demands across all council services.
Members also agreed a further 2% National Social Care Levy increase in council tax, which will be used specifically for demand and cost pressures within adult social care.
This will increase the band C rate to £1,007.60 and raise a further £11 million specifically to meet the pressures on social care budgets.
KCC continues to make significant savings by changing the way services are delivered, such as upgrading streetlights to more efficient LED, and developing and transforming the way adult and children’s services are delivered.
This includes investing in quality preventative services that avoid, wherever possible, expensive interventions, such as taking children into care and supporting independence for adults, helping them to remain in their own homes.
The council will also continue its efficiency drive, with 150 job losses on top of more than 2,000 that have been made over the last five years.
To find out more and read the draft budget, visit www.kent.gov.uk/budget
Kent County Council Leader Paul Carter’s budget speech in full:
This county council budget four years ago was in excess of £1.1billion, which will now shortly reduce to £890 million.
This represents over a £200 million reduction – some 20% of our budget – whilst at the same time containing demand pressures on our services, predominately beyond our control, amounting to some £230 million.
And incredibly with no substantive service reductions and indeed in many cases, improving the quality of our services with £430 million savings delivered.
Demand for our services has predominantly been in learning disability, adult social care and in children’s services, as well as increases in concessionary fares and school transport costs.
As demography changes, we are having to support an aging population growing at 2% per year and similarly, growth in the school rolls and the number of young people entitled to school transport.
In addition, we have been able to deliver sensible pay increases for our staff and inflationary related increases to our external providers of services.
Delivering the current year’s revenue budget in balance has been a massive challenge, in particular adult social services demand and costs.
However, I am pleased to report that the mid-year position indicating an £11 million overspend is now predicted to deliver a modest underspend at year-end following intensive management action across the authority.
This will complete 16 years of delivering a balanced budget as a result of excellent financial management by this Conservative-led authority.
The tough financial challenges imposed by central government on local government over the last five years in their endeavour to reduce public expenditure and restore the public finances of this country, particularly for county councils, who have had to endure the greatest degree of pain having lost out by only receiving a small proportion of the financial benefit of the New Homes Bonus.
In Kent, our salvation has been found through a relentless pursuit of efficiency, innovation and transformation to avoid reducing front line services, whilst at the same time freezing council tax to help residents for three out of the last five years.
This could not have been achieved without the hard work, support and dedication of all of our staff, who I am sure all in this council chamber would like to warmly thank. Importantly also, we are grateful to our providers, particularly those delivering social care services, domiciliary care, residential and nursing, who have been on the receiving end of some pretty tough negotiating in recent years.
Aligned to this, I am sure we all welcome the introduction of the Living Wage and am pleased that our budget provides for substantial additional money to pay what is needed to our providers with the necessary additional resource.
And so to the job in hand for today in agreeing the Capital and Revenue Budget for the year 2016/17 and Medium Term Capital Budget.
In a nutshell, income from the central government Revenue Support Grant reduces by £42.9 million plus rising demands, pay prices, living wage etc. amount to £75.3 million.
By my maths, this delivers a financial challenge of finding a resolution to the £118 million financial problem.
I have already adjusted the Revenue Support Grant allocation following the hard fought campaign for the transitional grant announced this week by the Secretary of State for Local Government and Communities, which has eased the pain following the provisional local government settlement announced shortly before Christmas which changed the methodology for distributing Revenue Support Grant across the country.
This redistribution favoured Metropolitan authorities and took a further £180 million away from County Councils across the land.
Kent’s grant would have reduced by a further £11.2 million.
The introduction in the last week of the transitional grant provides Kent with £5.7 million leaving us £5.5 million worse off through the application of the new methodology intended to help authorities with smaller council tax bases and their ability to raise significant money through the social care precept.
Our loss has been to the gain of Metropolitan authorities, who of course, get the 100% benefit of the New Homes Bonus.
To hear the tosh spouted suggesting that Conservative Shires have had an advantageous treatment by Labour Members of Parliament in the local government finance debate yesterday beggars’ belief and is untrue.
The recent announcement from the Secretary of State also includes the instigation of a full needs-led fair funding review for local government which will take place at pace to arrive at a new formula for a non-domestic rate equalisation alongside the significant additional money coming shortly for the “local government better care fund”.
This will also indicate the distribution of the additional £13 million of non-domestic rates to local government with “yet to be defined new responsibilities”.
Regrettably we have to propose today a 1.998% increase in council tax charges in addition to the 2% social care precept, yielding an increase in council tax receipts of £37.7 million and leaves us again with the challenge of finding £81 million of savings.
So what’s the fix, what’s the solution?
- Continuing the relentless pursuit of efficiency, innovation and transformation in the way our services are delivered, saving a further £44 million, particularly building on focussed commissioning and procurement, targeted prevention avoiding high cost interventions (reducing demand) including transforming assessment processes and reducing property costs
- £26 million from debt management, financing and intelligent and prudent use of reserves
- £7 million additional income from Kent Commercial Services
- Keeping any service reductions to a minimum. There is a £2 million reduction in the highways maintenance budget (although we are hopeful that the pot hole fund announced in the Autumn Statement may fill this hole). Our fair proportion of the National figure, when announced would amount to some £1.4 million every year.
- £0.4 million from a reduction in member grants
Which, if my maths is correct, adds up broadly to £80 million worth of solutions.
Looking forward to the 2017/18 financial year
This financial year will be without a shadow of doubt the most difficult that this authority has ever faced in advance of the Local government Better Care Fund, where Government are indicating that that we will receive £17.5 million of additional funds arriving in 2018/19, rising to £33.7 million in 2019/20.
In light of this substantive financial challenge, I hope that we can move forward today by agreeing the 2016/17 budget without tinkering with our budget through the introduction of tinkering amendments by the opposition parties; there is frankly no room for additional spending.
Before I finish, a brief summary on the capital and schools budget, reminding everybody that we still have 400 maintained schools out of 591 in Kent.
Although schools have not had to endure the severity of reductions compared to local government, nonetheless, schools have still had significant challenge, having endured five years of flat cash with the same being applied in the coming year.
And regrettably, sixth form funding has substantially reduced in recent years.
And finally, our three year capital programme, spending some £709 million, of which £300 million is Schools and £200 million Roads and Infrastructure.
I am particularly pleased that we are able to complete our commitment to our excellent Special Schools by completing the modernisation and expansion programme.
It is clear that the opportunity to take up further prudential borrowing with the consequential revenue costs is exceedingly limited.
With a massive demand for new school places, the school expansion programme will regrettably have to be dependent upon developer contribution and government basic need grant.