Building the budget: after the Autumn Statement

The joint letter from the Leaders of Kent and Hampshire came a few days before the Chancellor’s Autumn Statement (17 November).

The Statement was in many ways better than expected for local authorities, at least upper tier councils with social care responsibilities. There was £1bn extra for social care in 2022-23, rising to £1.7bn in 2023-24 (60% via the NHS, the remainder through the local government settlement); the social care charging reforms were delayed, but councils are able to keep the funding associated with them; and councils have the ambiguous opportunity to raise more council tax, with the referendum limit (for social care authorities) rising from 3% to 5%.

All this has made a big difference to KCC (and other authorities) in setting their budgets. But it does not stop the requirement to make very difficult and painful savings decisions - it simply reduces somewhat the mountain to be climbed. Nor does it resolve the longer-term issues central to the Kent/ Hampshire letter. As I wrote in an article for the New Statesman, “the wolf is still at the door, even if he is no longer in the kitchen”. I have written in similar terms in the Municipal Journal.

At tomorrow’s Cabinet meeting, we will consider the latest financial monitoring report, which shows a projected overspend of £60 million for this financial year. The process of building next year’s budget, now in its later stages, has been helped by the Autumn Statement but is still exceptionally challenging.