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Covid pandemic could leave financial black hole of more than £100m for Kent County Council


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The continuing costs of dealing with the impact of the pandemic could leave Kent County Council facing a budget black hole of more than £100 million, its finance chiefs have warned.

Their warning comes as it emerged the county council has to date been allocated a staggering £346m in emergency funding to help weather the Covid storm.

Kent County Council finance chiefs have warned the authority faces a huge hole in its finances due to the pandemic
Kent County Council finance chiefs have warned the authority faces a huge hole in its finances due to the pandemic

That money has been used to cover the estimated loss of income it would have received for services alongside pressures on other services because of an increase in demand during lockdown.

In addition, the government has given KCC tens of millions of pounds to help public health officials tackle the pandemic.

The eye-watering figures show the full extent of the costs to the public purse of the efforts to minimise the impact of the coronavirus.

But while the county council has benefited from government subsidies this year, there is uncertainty over whether the government intends to offer councils more help in 2021-22.

Cllr Peter Oakford, the deputy leader of KCC, told colleagues at a meeting this week it was not yet clear if the government was prepared to offer more money. July 13

Cllr Peter Oakford has warned this financial year will be more difficult than last year
Cllr Peter Oakford has warned this financial year will be more difficult than last year

“Current trends are indicating Covid has not gone away and will be with us for some time," he said.

"This financial year we believe will be more difficult than last year because we are not expecting the grant that we had from central government.”

However, the authority has yet to spend £26m allocated to it by the government in 2020-21 – which has been put aside for use this year.

The pandemic has been described by KCC leaders as the biggest challenge the authority has faced since the Second World War and the financial consequences bear that out.

KCC received emergency funding in four tranches over the year allocated by the Ministry of Housing and Local Government.

"Kent districts have estimated some of the largest council tax losses among all county councils."

In addition, £135m was provided to the council in the form of specific grants from the government, largely to cover the costs of implementing contingency public health measures.

Council officials say the outlook for the authority could be turbulent because some of the income KCC lost will not necessarily be made up by the government.

Zena Cooke, the council’s corporate finance director, said: “We know that there was depressed activity in adult social care and children's services that is now beginning to come through in terms of the complexity of care that is required and the cost of that care.”

One issue that could affect the financial outlook is that coronavirus has resulted in a significant drop in the amount of money raised through the council tax.

The report says local tax collection “has been significantly disrupted due to the pandemic and economic recession. Kent districts have estimated some of the largest council tax losses among all county councils".

One of the impacts of the pandemic is that Kent districts have not collected as much council tax. Stock image
One of the impacts of the pandemic is that Kent districts have not collected as much council tax. Stock image

While the government has reimbursed councils for part of this money, it is based on a figure of 75% – on top of that, it has yet to say whether it will continue to do so.

Potential scenarios suggest that a worst-case budget next year could see KCC with a spending gap of £103m.

However, that gap could be a more modest £19.8m if the government was to repeat its financial support.

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