Kent County Council is not alone in facing a bleak financial outlook but what would it mean for day-to-day services if it did go bankrupt?
A Section 114 notice is a formal step taken by a council that means it would not pull the plug on existing services but that it would not authorise any new spending. It would focus on ensuring it met its statutory obligations to provide key services.
It is commonly issued by the council’s finance director and is accompanied by a warning that there is a serious financial situation that must be addressed.
The council must as part of the process stop any spending that is not essential or which can be postponed.
The only allowable expenditure permitted under an emergency protocol would include existing staff payroll and pension costs, paying for goods and services which have already been received, expenditure needed to deliver the council’s provision of statutory services at a minimum possible level, urgent expenditure required to safeguard vulnerable people.
What does this mean in practice? If you are someone who receives help from social services, such as getting help from carers in your own home, that would continue.
However, there may be a caveat: care plans might be amended as part of making savings.
And the same applies if your child has special educational needs – including getting to and from school. That too would continue but costs may go up.
And the same goes for rubbish collection, road repairs, parking and planning applications.
While all would continue, the council could look to see if it could cut costs, for example by delaying road repairs and fixing potholes.
Council employees would continue to be paid.
In Kent County Council’s case, the big pressure is in the budget for adult care, largely the result of people living longer.
But the authority also cites what it claims are out-dated mandatory services that need reform – including the legislation from the 1940s to provide Home to School transport provision and the requirement to provide a comprehensive library service based on legislation from the 1960s.
KCC argues that whilst there are some options for generating savings, “most of these are going to be very unpalatable and will impact on some of the most vulnerable in our society”.
The council cannot, however, leave things as they are and is expected to draw up a plan to stabilise spending and outline how it intends to balance the books.
While key frontline services are protected, the council is required to minimise spending where it can to help.
As part of that process,councillors are formally advised by the authority’s finance director of finance of the steps taken and must have a full council meeting to debate the move.
Kent County Council is not at that stage and clearly hopes that its dire warnings of the challenges it faces will result in some kind of financial help.
But having saved £810 million from its budget over the last decade, its options are severely limited.
As its uncompromising letter makes clear,without financial help, “all of upper tier local government will soon go over the cliff edge.”
Will it find the government in listening mode? We may get a clearer view this week.