Kingston Council could face bankruptcy in two years warns leader

Kingston Council could follow Northamptonshire County Council into effective bankruptcy in little more than two years according to the authority’s leader.

Councillor Liz Green, who took over the leadership at the May elections this year, said there is still time to avoid collapse, but the council needs to act fast, She warned of “tough decisions” ahead.

She said: “We are not bankrupt, but I think we are about two years behind Northamptonshire.

“Some of the decisions they were taking two years ago are very similar to what we are going through right now.

“If we do nothing and don’t get on top of the finances, we could be in effective bankruptcy by 2021.”

Councils do not go bankrupt, but rather are forced to issue a Section 114 notice admitting they do not have the money to meet their current expenditure, which is what Northamptonshire County Council has done twice so far this year.

In practice this could mean the government stepping in and taking control of the council, or forcing huge cuts to non-essential services.

Cllr Green said: “We are in the position where we can turn it around. It’s going to be hard, but we can turn it around.”

The council predicted a £3.9m overspend for this financial year at a meeting on October 4, with some of the planned £22m in savings from this year’s budget at risk of not being achieved.

Cllr Green blamed the previous administration.

One example she gave related to a planned £6.5m saving from staffing costs, part of the council’s 'No Stone Unturned' programme of cost-cutting started by the Conservatives in the last two years.

She said there was no detailed plan for how those savings would be made in each department.

Another example was the lack of a business case prepared for the investment company the council is going to set up to make money by buying property and renting or leasing it out.

Cllr Green said the upshot is decisions on cuts and council tax will have to be made when preparing the budget for next year.

She said: “There will be savings that have to be made. I honestly don’t know what they are going to be yet. We are looking at that, but it will be a changing picture between now and January.”

The leader of the previous administration, current opposition leader Councillor Kevin Davis, said Kingston’s finances are in fact fine, and said the planned workforce savings were detailed, and that a business case for the investment company was made when the budget was agreed earlier this year.

He said: “The comparison with Northamptonshire is just rubbish. We are nowhere near that.”

He said there is often a point mid-way through the year when it looks like there might be an overspend, but it is sorted by March, and he pointed to last year when the council actually underspent.

“I understand that a new administration always wants to blame the previous one for the tough decisions it has to make,” he added.

“But Cllr Green needs to be really careful about trashing the council’s reputation like this. There’s nothing wrong with the council’s finances.”