Agenda item

Dave Shipton, Head of Finance Policy, Planning and Strategy was in attendance for this item.

1) Mr Oakford said that the Chancellor of the Exchequer announced a Spending Review on 7 September 2021 and was for the next 3 financial years which was a welcome change following recent 1 year settlements.  A 3 year settlement would allow KCC to plan. The outcome was to be announced on 27 October with Autumn Budget. The deadline for submissions to review by external stakeholders was 30 September. Thanks were given to Dave Shipton and the Finance Team for the huge amount of work put into the report within a short time. It was hoped that government would take the submission into consideration.

2) Mr Shipton said that the responses from local authorities were likely to have commonality and cover similar points. KCC welcomed the 3 year settlement and KCC’s submission included the impact of previous settlements since the last multi-year Spending Review, which covered 2016-2019.  There had been two subsequent 1 year settlements in 2020-21 and 2021-22.  In revenue terms, the submission notes that over this period an additional £221million was raised in Kent through council tax, which had increased KCC’s budget in cash terms but there had been a £40.5million reduction in grants from central government (excluding Covid-19).  The submission questioned whether this mix of council tax and grants was sustainable moving forward and it was felt there had been an over reliance on council tax. Spending had increased by £500million over the same period and therefore, there was a shortfall in real terms.

Total capital spending had been £1.6billion over that period, of which over £324 million had been funded by borrowing which had an effect on revenue budgets. KCC had a comparatively high level of long-term legacy debt to fund previous capital spending, and if KCC had to take out additional borrowing to fund future capital investment, the financing cost of that could take a significant proportion of any future council tax receipts, if there was not adequate grant funding as part of the Spending Review settlement.

Most of the focus in the submission was on the overall quantum to make sure that local authorities had sufficient resources to meet the demand. 

Other comments made in the submission included:

·       The adequacy of dedicated schools grant (DSG) and reference was made to the high needs block.

·       Evidence was given around social care pressures with increasing complexity of cases and higher costs from clients coming into the system.

·       Focus had also been given to the additional £5.4 billion for new social care reforms and whether that was adequate.

·       Council tax reform was long overdue.

·       Funding reforms through the Fair Funding Review which had been delayed.

3) The Leader said that he welcomed the points made in the report regarding the importance of areas such as infrastructure, economic development, ‘levelling up’. KCC’s ability to play a role in this was dependent on the degree of increasing demand-led expenditures and the ability to flex some resources into those other areas.

The Leader asked for the wording on 6^th paragraph of page 16 of the submission which said:

The plan to allow self-funders to access care at the same personal cost as local authority supported clients is likely to lead to increased costs for existing and new local authority clients and needs to be funded as part of the £5.4bn package for social care over 2022-23 to 2024-25.

to be changed to reflect that clients would need to be funded regardless of the adequacy of the allocation from the £5.4billion package.

4) RESOLVED to note the timetable for SR2021 and endorse the Spending Review submission.