Council could be forced to make £20 million savings as Grenfell costs continue to mount

Kensington & Chelsea Council may be forced to find £20 million in savings over the next two years, its number-crunchers have warned.

The Royal Borough of Kensington & Chelsea Council 's latest accounts also reveal just how far the wealthy borough's cash reserves have fallen, as the authority continues to pay for the Grenfell Tower tragedy aftermath.

Its £274m usable cash reserves were widely noted in the immediate aftermath of the fire, but they are depleting after the council streamlined then raided its reserves to pay for Grenfell-related expenditure.

Its latest figures showed they had dropped to £136m this March, with another £52m earmarked for spending in 2018/19.

An RBKC spokesman said a definitive figure would be settled upon in November, when the staff calculate final budget estimates, and councillors begin discussing spending.

It comes as local authorities await news of how the Government's review of its Fair Funding formula, the complex calculation used to allocate their baseline funding.

In the current funding regime, and even after the 2 per cent annual increases in council tax, RBKC would need to look at making budget savings over the next two years of about £20m, its accounts show.

An RBKC spokesman said the £20m prediction was made some time ago, and there were "no plans" to cut services to make savings, as it was too soon to know what the next two years' budget outlook would be.

It was also "way too soon to know" whether residents of the borough could face an increase in council tax, he said.

The outlines of the new Fair Funding formula are scheduled to be revealed later this year.

"The council will continue to lobby for the new formula to account for London-wide and RBKC-specific concerns and issues," the council's spokesman said.

Labour opposition leader Cllr Robert Atkinson said he wanted to see the review address the council's specific needs, including its ongoing Grenfell-related expenditure.

He said the examples of cash-strapped Northamptonshire and East Sussex councils, which have had to cut essential services to the bare minimum due to budget shortfalls, showed a local government funding regime in "national crisis".

Cllr Atkinson noted that while RBKC had significant cashflow, the borough faced pressure on adult services from its ageing population, and growing demand for spending on children with special educational needs.

He said Labour would be fighting to ensure if any savings did need to be made, they did not target non-statutory council-funded youth services, speculating cuts could more likely target street management services.

The Government had provided £28 million from Treasury coffers for RBKC to help Grenfell survivors.

However, Cllr Atkinson said the Government needed to do more, as the bill, including for rehousing survivors, continues to mount.

He said: "I don't think the taxpayers of Kensington and Chelsea should be expected to be paying for these exceptional circumstances, so I am looking to Central Government to give us additional funding."