Agenda item

Mr Carter (Leader of the Council), Mrs Crabtree (Deputy Cabinet Member for Finance and Traded Services), Zena Cooke (Corporate Director Finance) and Dave Shipton (Head of Finance, Policy, Planning and Strategy) were present for this item. 

1.            Mrs Crabtree introduced this item and explained that over the last 10 years it had become increasingly difficult to balance the books, the Revenue Support Grant (RSG) was shrinking, costs were increasing and, for example, there was a rising number of elderly people in Kent many with complex needs and in need of the services of KCC.  In the previous 10 years savings in excess of £600million had been made, the savings for 19/20 were around £43million and the council was having to propose increases to Council Tax and looking at the discretionary services provided. 

2.            Members received a presentation from Mr Shipton on the Draft 19/20 Budget.  This presentation can be viewed online via this link or at https://democracy.kent.gov.uk/ieListDocuments.aspx?CId=752&MId=7911&Ver=4

3.            In response to a query about the Kent Business Rate Pool Mr Shipton confirmed that Dover and Sevenoaks Councils were not part of the pool for valid reasons regarding the tax base in each region. 

4.            A Member asked for confirmation about the decline in the rate of growth of the Council Tax base.  This was due to a combination of new houses (many single occupancy households) and changes in the council tax discounts.

5.              In response to a question about the average council tax collection rate Mr Shipton stated that it was 98.5% across all 12 districts.  The collection rate of some districts was significantly lower than that average and the majority collected 99%.  There had not been a noticeable decline in the past year, this was likely to be significant in future years and the final tax base estimate had not yet been provided by the district councils. 

6.            Members discussed the use of reserves and the balance between using reserves and making savings; Kent had a debt to reserve ratio of 107%.  Mr Shipton explained that when last year’s budget was set it was on the basis that the £10.8m wouldn’t be drawn down in 18/19 but it would be drawn down in 19/20, Members had agreed at County Council in July that a further draw down from reserves would occur to address the pothole situation because of the severity of the 2017/18 winter.  Mr Shipton explained that there was no definitive ratio with regards to reserves/debt, this had been used in the past to test the financial resilience of authorities, it was often difficult to repay debt early and this sometimes carried excessive penalty clauses.  Mr Shipton offered to circulate a copy of the reserves/debt graph with a third dimension showing the relative change from one year to another of each authority. 

7.              The Leader explained that there were encouraging signs with the fair funding model from 2020/21, it was hoped that a significant proportion of the Council’s debt would be funded through the fair funding model. 

8.            A Member asked about the Social Care Levy and the interim arrangements for supporting social care costs, Mr Shipton explained that this was by far the most important part of the fair funding review, the Council had been questioning the formula and had consistently challenged it, it was hoped that this would be addressed in the fair funding review.  Mrs Crabtree stated that Members were lobbying hard to ensure that something was done to alleviate this situation. 

9.            Regarding high needs demand, a Member asked whether officers were investigating how many children/young people there were in Kent with undiagnosed additional needs.  Mr Shipton explained that officers mapped trends in demand and the extra demand was significantly higher than the growth in numbers of children.  There was a significant overspend on the DSG and there would be a point at which the costs would be unsustainable.

10.         Mr Carter considered that there was an oversupply of special schools in Kent, particularly in the independent sector, the percentage of pupils in special schools in Kent as a proportion of those with an Education, Health and Care Plan (EHCP) was above the national average, the link with special needs transport was inextricable.

11.         A Member questioned the spending on adult social care or children’s social care, how many other authorities were spending 63% of their total net budget?  Was this sustainable and how high should this spending get?  Mr Carter explained that the Council had a statutory duty to provide services, but this again related to the fair funding model and the need for a formula for distributing funding to ensure it was proportionate for each authority.  Mr Shipton commented that it was vital to ensure that the fair funding formula was future proofed.

12.         A Member commented on the quality of the EHCP, if they were more accurate and more appropriate for each child money would be saved, the child would get a better education and support, however this was incredibly difficult to do. 

13.         In response to a question from a Member about the wording in the presentation relating to Brexit as a budget risk, Ms Cooke confirmed that this would be revised to ensure that it was clear that the Council did not want to limit spending to direct costs, and that the authority was looking at the wider costs of Brexit.  The wording (as below) would be revised to say limit rather than isolate. 

BREXIT adds unfunded pressures (capital and revenue) – possible government grant but we would not want to isolate limit spending solely related to Brexit and would also need to support core budget

14.         A Member asked for confirmation about the spend, through the Capital Programme, on education and school provision that was not fully reimbursed through Department for Education (DfE).  Mr Shipton explained that there would be a £1million revenue consequence by 2021/22 rising to £4million by 2022/23.  The total 3 year spending was around £222million, £84 million was basic need, £64million was developer contributions and £70million was the Council’s commitment to borrow to fund existing shortfalls.  The member commented that this was a policy decision that had to be made to determine whether the council should only spend the money it received in respect of the statutory responsibility for education.

15.           Mr Carter explained that within the Education Commissioning Plan it was written that no further prudential borrowing would be taken up to deliver the schools capital programme.  Mr Carter was encouraging other counties across the country to do the same.

RESOLVED that the Scrutiny Committee note the report and thank Mr Carter, Mrs Crabtree, Zena Cooke and Dave Shipton for attending the meeting and for answering Members’ questions.