The Cabinet of Kent County Council met on Thursday, 9 January 2025, to discuss the provisional local government finance settlement for 2025-26, review the second quarterly performance report for 2024-25, and consider the corporate risk register. A significant decision was made to agree to submit a request for Kent and Medway to be included in the Government's Devolution Priority Programme and to request the postponement of the May 2025 county elections.

Provisional Local Government Finance Settlement 2025-26

The Cabinet received an update on the Provisional Local Government Finance Settlement (PLGFS) for 2025-26, published on 18 December 2024. This settlement outlines the core spending power (CSP) available to local authorities, taking into account council tax proceeds and grants from the Ministry of Housing, Communities and Local Government. The provisional settlement is open for consultation until 15 January, with the Council intending to respond. A further consultation on local authority funding reforms for 2026-27 closes on 12 February.

Members noted that while the Recovery Grant appears to favour councils with immediate financial pressures, the long-term methodology for funding distribution requires further review. The current methodology for the Recovery Grant, based on population weighted by the Index of Multiple Deprivation (IMD), was discussed, with a hope that future reviews would establish a more robust method for measuring deprivation. It was also noted that the formula for the Adult Social Care grant has not been updated since 2013-2014. An encouraging aspect of the Children's Social Care Prevention Grant is the inclusion of an assessment for remoteness issues, recognising additional costs in sparsely populated areas.

Concerns were raised about the reduced level of funding allocated to Kent County Council (KCC) due to the assessed needs methodology. It was deemed paramount that KCC's consultation response strongly articulated the detrimental impact this reduced funding would have on services. The potential disadvantage for Kent and Medway through reduced powers and funding if they are not included in the devolution agenda was also highlighted, as evidenced by KCC's significantly reduced Core Spending Power compared to other councils.

The Cabinet resolved to note the provisional settlement and delegate the finalisation of any response to the settlement to the Corporate Director for Finance, in consultation with the Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services.

Quarterly Performance Report, Q2 2024-2025

The Cabinet reviewed the Quarterly Performance Report (QPR) for Quarter 2 (Q2) of 2024-25, covering performance data up to the end of September 2024. Of the 40 Key Performance Indicators (KPIs), 16 achieved their target (Green), 15 met or exceeded the floor standard but not the target (Amber), and eight did not meet the floor standard (Red). One KPI had no data available at the time of publication. The report indicated a positive trend in 11 KPIs, with 22 remaining stable and six showing a negative trend.

Specific areas of concern were highlighted, particularly within Children, Young People and Education services, notably regarding the percentage of case-holding social worker posts filled by permanent qualified social workers and the percentage of care leavers in education, employment, or training. The high volume of Unaccompanied Asylum Seeking Children (UASC) was noted as significantly impacting the delivery of children's services.

Progress was acknowledged in the percentage of pupils with Education, Health and Care Plans (EHCPs) being placed in independent or out-of-county special schools, moving from Red to Amber. The Special Schools Review is expected to further improve this trajectory. The KPI for overall school effectiveness judgement will no longer be reported following changes to Ofsted inspections.

Positive performance was noted in the No Use Empty programme, with 119 long-term empty properties made fit for occupation in Q2, and the Kent and Medway Business Fund approving loans totalling approximately £1.64 million since July 2023.

Significant work has been undertaken by the Information Resilience and Transparency team to improve Freedom of Information (FoI) request management, with the backlog now cleared. However, work continues to improve completion timescales for Subject Access Requests (SARs).

The Cabinet resolved to note the Q2 Performance Report and the actions being taken to address areas where performance is not meeting targets.

Corporate Risk Register

The Cabinet received an update on the Corporate Risk Register following a formal review of KCC's risk profile. The review took place against a backdrop of significant financial and operational uncertainty within the local government sector, influenced by the new Government's Autumn Budget Statement, the delay to the EU's Entry/Exit System (EES), and the publication of the English Devolution White Paper and provisional Local Government Finance Settlement.

Key changes to the register include the de-escalation of the risk related to Reinforced Autoclaved Aerated Concrete (RAAC) in schools and the corporate estate, and the addition of a new risk concerning the implementation of the Oracle Cloud Programme. The risk associated with the capacity to accommodate and care for Unaccompanied Asylum Seeking Children (UASC) has been reduced from High to Medium due to secured funding and improved National Transfer Scheme (NTS) operations. The risk related to border fluidity has also slightly reduced, though remains High.

Revised risks include the adaptation of KCC services to climate change impacts, now rated Medium, and the SEND Delivery Improvement and High Needs Funding shortfall, which will be separated into two distinct risk profiles due to differing drivers and ratings. The risk of Capital Programme Affordability has been retitled to reflect its focus on asset management and degradation.

Several risks remain at their maximum ratings, including the future financial and operating environment for local government, significant failure to control budget overspends, and the sustainability of the social care market. Particular concern was raised regarding the social care market, with the Budget Statement's announcement on National Insurance contributions and the National Living Wage impacting providers. The implications of the English Devolution White Paper will lead to a review of the council's risk profile.

The Cabinet resolved to note the report.

English Devolution White Paper

The Cabinet considered the Government's proposal to establish a Devolution Priority Programme and whether Kent and Medway should request inclusion. This decision also involved considering the postponement of the County Council elections scheduled for May 2025. Following extensive debate at a County Council meeting, which endorsed an application to join the Devolution Priority Programme and requested a postponement of the KCC Elections, the Cabinet was asked to agree to submit a joint request with Medway Council for inclusion in the Devolution Priority Programme and to request the Minister for Local Government and English Devolution to consider postponing the May 2025 county elections.

Cabinet members acknowledged the extensive debate at Full Council and noted that the current local government structures, established in 1972, were being addressed through the Devolution Priority Programme. While acknowledging the potential for Mayoral Strategic Authorities (MSAs) to strengthen the Council's strategic capabilities and the Government's focus on public service reform, concerns were raised about the lack of information regarding the management of Local Authority debt during any transition.

Cabinet members supported the postponement of elections to focus resources on the work required to create an MSA, alongside reorganisation and maintaining business as usual operations. They emphasised the importance of transparency and collaboration with key partners, including the Police and Crime Commissioner, Fire Authority, District and Borough Councils, and Medway Council.

The Devolution Programme was seen as an opportunity to transform Kent's transportation landscape, potentially securing a dedicated ring-fenced budget for transport, improving bus services, road repairs, and traffic management. Centralising responsibilities was expected to streamline operations across the 12 District Councils, ensuring uniform service quality. Devolution would also strengthen Kent's voice in land use and transport planning, integrate solutions from the outset, and provide access to significant funding opportunities.

While acknowledging the inherent risks and unknowns, including the election of a Mayor, responsibilities of the Mayoral office, costs, staffing structures, capital investments, and funding, members agreed that the risk of inaction and falling behind other local authority areas outweighed the risks of pursuing devolution. The reform was viewed as an opportunity to streamline and improve, rather than a reflection on current services.

The Cabinet agreed to submit a request to the Government, jointly with Medway Council, for Kent and Medway to be included in the Devolution Priority Programme. They noted that acceptance would commit Kent and Medway to elections for a new Mayoral Strategic Authority (MSA) in May 2026 and local government reorganisation by April 2027 or April 2028. Furthermore, they agreed to request the Minister for Local Government and English Devolution to consider postponing the county elections scheduled for May 2025.

Cabinet Member Updates

Cabinet Member updates were deferred to the next meeting of the Cabinet.

Revenue and Capital Budget Monitoring Report - September 2024-25

The Cabinet received the Revenue and Capital Budget Monitoring Report for Quarter 2 of 2024-25. The report indicated a forecast revenue outturn overspend of £26.8 million (excluding schools), representing 1.9% of the revenue budget. This overspend had increased by £10.5 million compared to the previous quarter. The largest overspend was within Adult Social Care & Health (£32.5 million), with £22.7 million attributed to savings that could not be delivered in the current year but were expected in future years. The remaining £9.8 million was due to other service pressures, primarily driven by increased costs for social care placements. Similar challenges were reported by other upper-tier local authorities, with 81% expected to overspend on their adult social care budgets.

Workstreams with external consultants are underway to identify savings and reduce the forecast overspend. The report highlighted that non-delivery of savings would significantly impact future budgets, and any overspend weakens the Council's financial sustainability. Reserves are being used without the ability to replenish them. The capital programme had spent £123.3 million to date, with a projected £90 million underspend for the full year, largely due to rephasing of projects.

The Leader noted progress in areas such as SEND reforms but acknowledged that savings in Adult Social Care and Health remained a significant pressure. Difficult decisions would continue to be made to manage budgetary tensions, particularly as reserves were low and needed replenishment. Members noted that until the Government addressed the need for reform or structural change in funding, these issues would persist. Tribute was paid to staff in the Children's, Young People and Education Directorate for their work in delivering projected savings and remaining within budget, particularly in supporting families to reduce the number of children in care. However, residential and semi-independent placements for children continued to present a financial challenge.

The Cabinet resolved to note the forecast revenue overspend and actions being taken to mitigate it, the forecast overspend on Schools' Delegated Budgets, the forecast capital underspend, and progress on savings delivery. They also agreed to capital budget changes and noted the monitoring of reserves, treasury management, and prudential indicators.

Adoption of the Kent County Council Environment Plan

The Cabinet adopted the Kent County Council Environment Plan, designed to unify and enhance the organisation's environmental and sustainability efforts. The plan is structured around six goals and aims to support environmental, growth, and health outcomes without imposing additional financial burdens. Actions within the plan will have corresponding target outcomes reported annually. The plan is intended to be a live document, embedded across all Council operations. Members noted the need for organisation-wide support and acknowledged that outdated legislation needed updating to address issues such as sewage pollution in waterways. The plan's reliance on landowner participation was highlighted, alongside the potential impact of government budget announcements on landowner funding. The Council's achievement as the third lowest County Council in England for municipal waste sent to landfill was noted as evidence of its commitment to environmental growth and sustainability. The plan will also address seawater pollution impacting tourism and local facilities. The Cabinet delegated authority to the Corporate Director of Growth, Environment and Transport to refresh and revise the strategy as appropriate.

Adoption of the Kent County Council Climate Change Adaptation Plan 2025-2028

The Cabinet adopted the Kent County Council Climate Change Adaptation Plan 2025-2028, which outlines how the Council will adapt its assets and services to climate change. The plan was shaped by findings from the Climate Change Risk and Impact Assessment for Kent and Medway. Actions within the plan will have corresponding target outcomes reported annually. The Cabinet delegated authority to the Corporate Director of Growth, Environment and Transport to refresh and revise the strategy as appropriate. Members welcomed the plan's recognition of current issues impacting residents, such as landslip closures, and noted that the Council had already made changes to its work programme due to climate change impacts, such as increased issues with verges due to wetter summers and milder winters. The plan was seen as crucial for building awareness and resilience.

Financial Hardship Programme

The Cabinet noted the report on the Financial Hardship Programme, which provided an overview of support provided in response to ongoing financial pressures, focusing on the Helping Hands Scheme and the Household Support Fund. The report also outlined work to support the uptake of Pension Credit. Members paid tribute to the team's outstanding work and acknowledged the detrimental impact of the government's decision to withdraw the winter fuel allowance. Discussions also covered the allocation of the Household Support Fund, with confirmation that early discussions would be held with districts and boroughs regarding funding distribution. The Cabinet noted the report.

Provisional Local Government Finance Settlement 2025-26

The Cabinet noted the provisional local government finance settlement for 2025-26, which indicated an overall increase in funding compared to previous assumptions. However, concerns were raised about the prescriptive nature of how some new funding, such as the Children's Social Care Prevention Grant, would be spent, undermining local decision-making. A policy shift by central government towards urban areas, reflected in the Recovery Grant distribution, was noted as not benefiting the County Council. The settlement being for only one year was seen as a hindrance to long-term planning, although the move towards multi-year settlements was welcomed. The Cabinet agreed to delegate the finalisation of any response to the settlement to the Corporate Director for Finance, in consultation with the Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services.

Quarterly Performance Report, Q2 2024-2025

The Cabinet noted the Quarter 2 Performance Report for 2024-25, which detailed performance against 40 Key Performance Indicators (KPIs). Of these, 16 were rated Green (achieved target), 15 Amber (met floor standard but not target), and eight Red (did not meet floor standard). The report highlighted that performance indicators giving the greatest concern aligned with services facing the most acute financial strains and demand, particularly in Special Educational Needs and Disabilities, children in care placements, and Adult Social Care. The Cabinet noted the report and the actions being taken to address areas where performance was not as targeted.

Corporate Risk Register

The Cabinet noted the updated Corporate Risk Register, which reflects the Council's risk profile following a review. The register now contains 16 risks, a reduction from the previous year, with some risks having been de-escalated or withdrawn. A new risk concerning the implementation of the Oracle Cloud Programme has been added. The report highlighted progress in managing risks related to Unaccompanied Asylum Seeking Children (UASC) and the SEND agenda. The Cabinet noted the report.

English Devolution White Paper

The Cabinet agreed to submit a request to the Government, jointly with Medway Council, for Kent and Medway to be included in the Devolution Priority Programme. They noted that acceptance would commit the area to elections for a new Mayoral Strategic Authority (MSA) in May 2026 and local government reorganisation by April 2027 or April 2028. Furthermore, they agreed to request the Minister for Local Government and English Devolution to consider postponing the county elections scheduled for May 2025. This decision was made following extensive debate and consultation, with the aim of strengthening strategic authority, improving efficiency, and securing significant funding opportunities.

The Cabinet Member updates were deferred to the next meeting.