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Concerns over council intention to hike tax by 5% to boost reserves

Friday 15th January 2021

CONCERNS have been raised over a proposed 5% hike in tax by the council after it was revealed the extra funds would be used to “bolster” its reserves, writes Ciaran Duggan.

Kent County Council (KCC) unveiled its budget plans for the next financial year amid “unprecedented” circumstances caused by the pandemic.

If approved in a vote involving 81 councillors on February 11, the county’s 1.58 million residents may need to fork out an extra £37million, say KCC chiefs.

It means the annual KCC council tax bill would increase by £60 for a band C home, rising from £1,200 to £1,260.

However, some Tory county councillors had questioned the proposed decision during an online meeting involving KCC’s policy and resources committee earlier today.

Maidsone county councillor Gary Cooke (Con), a committee member, said: “In the difficult times that all our residents are facing, we are asking them to fund a 5% tax increase in Kent. Part of which will go towards bolstering our cash reserves.

Speaking to the virutal panel, the former County Hall cabinet member added: “Reserves are for the rainy day, but we are in a rainy day.

“I accept our reserves have become depleted over recent years, but is this the right time to start replenishing those?”

Defending the tax hike, KCC’s cabinet member for finance, Cllr Peter Oakford (Con), said: “We need to make sure we have some money in our back pocket for when the unexpected happens throughout the next financial year.”

Under the plans, KCC would have just over £50million of cash in its reserves, amounting to 5% of KCC’s total £1.1billion spending budget for April 2021 to April 2022.

Dave Shipton, who is the head of financial strategy at KCC, said County Hall remains “heavily dependent” on council tax to finance services, including support for 1,200 older people in nursing homes and 4,900 adults with learning disabilities.

KCC’s corporate director for finance, Zena Cooke who has over 30 years’ council finance experience, said: “In my entire career I have never experienced the level of uncertainty and financial risk when putting together a budget.”

She described KCC’s reserve levels as “sufficient” but were at the “lower end of adequacy” compared to England’s hundreds of other local authorities.

Maidstone County Hall also faces a “significant reduction” in tax collections. This comes as low-income households can claim discounts, such as 25% off the council tax bill for people living on their own.