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Coronavirus Kent: 'Significant' £245m budget shortfall forecast for Kent's 14 councils

Kent's 14 councils face a mounting financial deficit of £245million from the coronavirus crisis, it has emerged.

The 12 districts councils are expected to have a £155m shortfall from the pandemic, which amounts to around £12m on average for each of the authorities.

Kent County Council headquarters in Maidstone
Kent County Council headquarters in Maidstone

Medway Council will have to find ways to recoup a £40m deficit while Kent County Council (KCC) is predicted to have a £50m shortfall due to additional spending and loss of income from business rates and council tax.

KCC's cabinet member for finance, Cllr Peter Oakford (Con), described the Covid-19 deficits as "significant" in a dossier that was published to County Hall's scrutiny committee two days ago.

In the KCC paper, he says: "If sufficient government funding is not forthcoming, it will be necessary to utilise a proportion of general reserves to balance the budget in the current year.

"The funding drawn down from reserves will need to be replenished as part of the following year’s budget to avoid a negative impact on the council’s future financial resilience."

The worrying economic situation faced by Kent councils has been collated by Whitehall's Ministry of Housing, Communities and Local Government, which is headed by secretary Robert Jenrick.

Medway Council offices at Gun Wharf, Dock Road, Chatham
Medway Council offices at Gun Wharf, Dock Road, Chatham

Boris Johnson's government has provided around £96m to Kent's local authorities, including £66m for KCC; £14m for Medway and £15m for the 12 districts, including Sevenoaks, Maidstone, Ashford and Thanet.

The 14 councils have made £129m extra spending commitments to key services, but simultaneously face income losses of around £212m over the next 12 months, according to the KCC paper.

The losses include £110m of council tax; £47m from fees and charges, such as £3m from car parking, £26m of business rates and £6.6m of housing revenue.

Canterbury City Council's administration headed by beleaguered leader Cllr Robert Thomas (Con) has furloughed 49 members of its staff due to the pandemic crisis to save £40,000 from the authority's £12million deficit.

On May 26, he said: “The finances won’t change the world in one sense because our problem is much bigger than £40,000.

Cllr Robert Thomas. Picture: Chris Davey
Cllr Robert Thomas. Picture: Chris Davey

"But we need to use the authority’s resources to the best of our ability.”

His authority has also had to put the £12m Canterbury council offices move on hold, along with the £3.6m expansion of Wincheap park and ride expansion.

In April, Maidstone council leader Martin Cox said his authority expected to lose £7.4m in come this year due to a slower collection of council tax and business rates, along with the closure of services such as leisure centres.

Similar issues are faced by the remaining district authorities.

On May 18, Cllr Oakford, who is also KCC's deputy leader, said he feared KCC's budget could be left with an "enormous hole" of up to £200m.

County councillor Peter Oakford. Picture KCC
County councillor Peter Oakford. Picture KCC

Around £67m has been covered by the government and KCC chiefs have written to Chancellor Rishi Sunak to explain the dire situation.

Cllr Oakford's latest financial report will be discussed by the 18 members of scrutiny committee in five days' time in a virtual Microsoft Teams meeting from 11am.

A further paper will be submitted to KCC's cabinet on June 22 setting out the county council's financial plans and worrying economic impacts of Covid-19 predicted on County Hall's budget for the next two years.

KCC's full council will then meet in September to consider a revised budget.

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