More on KentOnline
More on KentOnline
The impact of the coronavirus pandemic on the public sector has been vividly underlined by the disclosure that Kent County Council (KCC) was bailed out to the tune of £362m by the government last year.
But will things be any brighter for the county council and council taxpayers this year? Our Political Editor Paul Francis examines what could lie ahead.
The key questions:
Will your council tax go up again?
Undoubtedly - though whether it will match the 5% hike this year is uncertain. For councils, tackling the Covid crisis, it could not have come at a worse time.
Most were already in financial turmoil and coming to terms with another round of cuts when the government’s first lockdown was announced. Ministers were left in no doubt that unless there was some subsidy, the chances of councils going bankrupt were growing.
After a 5% hike, councils are unlikely to have much wiggle room to keep household bills down. Covid has led to growing numbers who have become eligible for discounts because they are working less or have lost their jobs.
To help, KCC gave a discount of £50 on bills for those on Council Tax Reduction Scheme (CTRS) - of which there are over 65,000 families eligible, compared to 56,000 a year ago.
Repeating that discount may be asking too much - it cost £6m - and paradoxically, means that top tier councils like KCC will have to find some way of balancing the books itself.
Question: What about business rates?
Some mixed views on this and it’s not all bad. The government effectively scrapped business rates and gave firms a tax holiday, throwing a lockdown lifeline to small businesses especially.
That tax holiday tapers down from 100% for all retail, hospitality and leisure businesses in England to a 66% discount until 31st March 2022.
Is it enough to safeguard jobs in the hospitality and tourism sector that is so important to Kent?
Maybe not: A report by county councillors said the impact of Covid-19 on the local hospitality and tourism industry has been devastating.
Nine out of 10 businesses in the sector closed, either temporarily or indefinitely – a higher proportion than in any other sector.
Businesses also reported the most redundancies, accounting for 32.6% of all registered job losses. Having said that, if the economy starts to recover, those that have survived are better-placed to benefit.
And the continuing uncertainty over holidays abroad and confusion over the countries where travel is permitted may mean a fillip for 'staycations'.
Question: How could care for the vulnerable be affected?
Some positive moves here with the government recently announcing an £160m extension to emergency grants aimed at giving vulnerable households peace of mind as Covid restrictions are eased by helping those who need it to have food on the table and other essentials.
Meanwhile, residential care homes will continue to have challenges, notably in terms of recruitment of staff and a growing number of people needing 24-hour round the clock care.
KCC will consider if the council tax it sets next year should as it does this year, include a social care precept.
Even if the government finally publishes long-awaited proposals to deal with the issue of how care costs should be met, it is highly unlikely that they would come into effect this year.
Question: How bad is the funding gap?
It depends. KCC has sketched various scenarios, ranging from a £20m shortfall to a £120m gap between what it needs and what it gets.
In its draft statement of its accounts, KCC pulls no punches, saying the coronavirus pandemic and its “major social and economic impacts is fundamentally changing the risk environment, with it likely to be even more volatile, complex and ambiguous for a number of years.”
As things stand, the government has yet to say if councils will receive more money this year.
However, ministers are likely to argue that with the easing of restrictions and a return to business as usual, the needs of local government are not so great.
That won't please the county council's ruling Conservative administration.
As the politician who has the finance brief at KCC Cllr Peter Oakford put it: “Covid is still going to be around...it’s not going away.”
