Agenda item

John Betts (interim Corporate Director Finance) and Dave Shipton (Head of Finance, Policy, Planning, Strategy) were in attendance for this item

1.    Mr Oakford, Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services introduced the report and acknowledged the immense efforts from officers to produce the budget, particular in light of the challenges posed within the current financial year.  Thanks were therefore expressed to finance colleagues, directorates, staff, and Cabinet Members for their contributions, emphasising that the budget was a collective effort.

The budget for the next financial year included a spending growth of £150 million, with £80 million allocated to Adult Social Care. Despite this, the council faced significant pressures, as over £60 million net in savings/income was still required for 2025-2026, on top of the £90 million saved for 2024-25. Mr Oakford noted that whilst the government's promise of additional funds was welcomed, the net growth in funding received from the government only amounted to £30 million, which was insufficient to cover the spending growth.

To address the shortfall, the council planned to raise council tax by 2.99% and an additional 2% for the social care premium, bringing in £47.3 million. However, this would still leave a substantial gap, which further highlighted the pressure on the council to make further savings. Whilst there was incremental spending in adults and children's services, other areas of the council had seen budget reductions to fund social care.

The government had announced a new recovery grant, however, the council received none of this funding, as it was allocated to areas with high levels of deprivation & lowest relative council tax base, which were not in the south of England. Mr Oakford noted that the growing costs of adult social care were not being adequately addressed by the government, leading to a situation where the council was close to only providing statutory services, with discretionary services disappearing.

Mr Oakford concluded by reiterating the systemic nature of the problem and the need for government intervention as the Council could not rely on reserves to fund the revenue budget; this was unsustainable and would lead to a financial crisis.

2.    The Leader advised that the Council, along with other organisations, such as the County Council Network (CCN) would be making representations to government on the spending review regarding the allocation of funding.

3.    Further to comments and questions from Members it was noted:

·         Members expressed their gratitude to Mr Oakford and his team for their diligent work, emphasising the significant effort required and thanked them for their continued dedication. Further thanks were expressed to the Cabinet Members, along with the officers and staff throughout the whole of the Council for their continued hard work to deliver exceptional services under difficult circumstances.

·         Without a resolution from Government on the funding issues in adult social care, new authorities with devolved powers would face significant challenges from the outset. Therefore, whilst Members were supportive of the devolution programme and the opportunities it presented, a government restructure would be futile whilst underlying challenges regarding adult social care remained.

·         The Children, Young People and Education directorate had received additional government funding for prevention work in children’s services. The additional funds allowed for the repurposing of previously allocated resources, ensuring that these crucial services could continue. This further related to the Children’s Wellbeing Bill which would place additional duties on local authorities, and ensured funds were appropriately allocated.

·         Concerns were expressed on the implications of local government reorganisation and funding realignment, particularly in relation to rural areas. Whilst there would be increased funding for urban and deprived communities, which was justified due to population density and the specific challenges these areas faced, rural communities also experienced significant levels of deprivation and should not be overlooked. There needed to be an equitable level of service provision across the country in recognition of the diverse needs.

·         Members noted the challenges of managing limited funding from successive governments. Comparison was made between Kent’s financial management and other councils, noting significant council tax increases were being requested elsewhere. Particular reference was made to:

o   Windsor and Maidenhead, 25%

o   Hampshire, 15 %

o   Bradford, 15%

o   Newham, 10%

o   Birmingham 10%

o   Cheshire East 10 %

o   Slough 8%

The Council continued to do an exceptional job in managing its finances prudently and effectively under very difficult circumstances and maintained the delivery of its services.

·         Furthermore, comparison was made between Kent County Council and Birmingham City Council, which was 27% smaller in terms of population, however, Birmingham were set to receive £40million of the government’s Recovery Grant, of which Kent were set to receive none. Additionally, Kent was due to receive a significantly lower allocation of the social care grant within the proposed settlement. In monetary terms, Birmingham City Council were due to receive £64.00 per head compared to Kent’s allocation of £16.00 per head.

4.    RESOLVED that Cabinet considered the proposed amendments from Cabinet Committees and endorsed the draft budget to be presented to County Council on 13^th February for final decisions.