The BBC names Kingston as fourth council in UK with largest two-year shortfall as a proportion of net budget

By Emily Dalton

21st Aug 2023 | Local News

Kingston Council faces serious budget shortfall over the next two years. (Photo: Emily Dalton)
Kingston Council faces serious budget shortfall over the next two years. (Photo: Emily Dalton)

Kingston Council is predicted a two-year funding gap of 26.2% of by the end of the 2023/24 financial year. 

The BBC Shared Data Unit found Kingston Council (RBK) has the fourth largest two-year shortfall as a proportion of net budget in the UK. 

Head of Local Government at Unison, Mike Short, said: "This is not a sustainable situation. Local authorities simply don't have the funds to provide even statutory services. 

"[Some] councils probably can't offer even the legal minimum of care support next year."

The BBC predicts there is a cumulative shortfall of £37.2m to balance the books by 2025-26, assuming there is no increase in council tax rate from 2024-25 onwards. The predicted deficit per person is £221.64.

The news comes despite RBK raising council tax by up to 2.99% (with 2% Adult Social Care) in 2023. 

The Local Government Association cited inflation, the National Living Wage, energy costs and ongoing increasing demand for services are adding billions of extra costs onto council just to keep services standing still. 

Additionally, Councillors approved a 4.04% increase on members' basic allowances for the 2022/23 financial year, backdated to April 2022 – from £8,623 to £8,971 a year. This represents a total increase of £32,500 in the current financial year, reportedly covered by the existing budget.

The council has not approved the right to use reserves to balance the budget in 2023/24. 

RBK responded to the BBC study, stating it "relies more heavily on income from council tax and business rates than many other authorities given that it receives very little revenue support grant (RSG), which has reduced down from £66 million in 2010 to £180k in 2023-24 (£4k in 2022-23).

The statement said: "RBK remains confident that its clear track record of savings delivery whilst continuing to deliver for residents will continue."

It also added: "RBK's cumulative shortfall (or budget gap) to 2025-26 of £37.202m assumes no increase in council tax rate from 2024-25 onwards.

"To put this into context, if we were to assume full increases at current thresholds for 2024-25 and 2025-26 (2.99% general Council Tax, 2% Adult Social Care precept) it would generate £5.8m towards the gap per annum. This would reduce the cumulative gap to £25.602m. RBK are currently revisiting all budget assumptions as part of the annual budget process for 2024-25 - 2027-28."

     

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