Allocating the £1.6bn - what it means for Kent

Ten days ago, the Ministry of Housing, Communities and Local Government (MHCLG) announced a second tranche of £1.6bn in support to local government. Yesterday MHCLG confirmed the allocation of this funding to individual local authorities - and it turned out to be on a very different basis to the first tranche.

The government made clear that the sharply different split of funding between County and District Councils reflects the financial pressure being felt (by Districts in particular) as a result of residents staying at home as requested during lockdown, and therefore not using services including car parks and leisure facilities. The first tranche was allocated overwhelmingly towards Counties in two-tier areas, with a strong focus on social care pressures. This time, the split between County and District authorities is 65:35.

The government has also confirmed that the Review of Relative Needs and Resources (the Fair Funding Review) and 75% business rates retention will no longer be implemented in 2021-22 to allow councils to focus on meeting the immediate public health challenge posed by the pandemic. The further deferral of the Fair Funding Review is deeply disappointing but inevitable under the circumstances; you can find the very measured assessment of this by the County Councils Network here.

Looking at the breakdown of allocations in Kent, the County Council receives £11m less in this second tranche than in the first (down from £39m to £28m), while the Districts in Kent will receive in total an additional £15m (up from £709K to £16m), meaning overall the allocation for the county has increased by £4m.

We are all aware of the enormous pressure being put on the whole local government family in Kent as we respond to this crisis. We will all continue to work together to ensure we keep our services running wherever this is possible and meet the new demands which arise from protecting the most vulnerable in the county with innovation and determination. It is not known how long the crisis will last and in the meantime the ongoing pressures on social care will remain; we will have to continue to provide PPE; support providers and businesses in Kent and deal with the many other calls on our funding.

Additional support for our District colleagues is very welcome; we all serve the same residents, and the pressures felt by Districts, especially through loss of revenue, are very real. However, as the County Councils Network has pointed out, Counties have seen a 29% fall in allocations between the two tranches and now face huge unfunded pressures, especially in areas such as social care, which could force a requirement to stop all non-essential expenditure . For KCC, while the £67m in grant from Government (combining the two tranches) is welcome, our latest forecast of the total financial impact on us in 2020-21 terms of extra spending and lost income is some £133m - twice the total grant so far.   

And so it will be necessary to continue to make the case directly to Government for recognition of the work we are all doing and the continuing costs of the essential support we are giving to Kent’s residents and businesses. Which is what we will continue to do.