Tonbridge to lose millions of pounds after being forced to accept new financial deal

    CHALLENGES AHEAD Sharon Shelton, Director of Finance at Tonbridge & Malling Borough Council

    AN AGREEMENT which ends direct funding from central to local government means Tonbridge & Malling Borough Council [TMBC] will receive the least money per person of all districts in Kent.

    The Leader of TMBC, Nicolas Heslop, described the settlement as ‘enormously frustrating and disappointing’.

    TMBC is one of 15 local authorities piloting the new financial arrangement that will see its grant from central government removed and substituted by the New Homes Bonus [NHB] scheme and a bigger share of local business rates.

    However, recent changes to NHB mean that TMBC is receiving £987,309 less than the previous year, a 14.6 per cent cut. Further down the line in 2022, TMBC could be receiving 65 per cent less (a £2.6million reduction) from the NHB than anticipated.

    The new deal now means Tonbridge & Malling will receive the lowest annual funding per head (£18.03) from central government out of the 12 districts in Kent.

    This is nearly two and a half times less than in Thanet, who receive funding equivalent to £44.10 per person.

    Reacting to the new financial -settlement, Cllr Heslop said: “It is enormously frustrating and disappointing that yet again we see -government make it ever more -challenging for us to afford delivering the level of local services that we know our residents expect from the Borough Council.”

    To plug the gap over the next four years, TMBC is planning to utilise its reserves and increase council tax by an average of £5 each year for band D properties, as well as finding efficiency savings to ensure it continues to fulfil its expenditure, which for the coming year (2017/18) is estimated to be £14.9million.

    This year (2016/17), changes to financial grants with the borough’s parishes enabled TMBC to save £625,000.

    Fewer resources

    However, as overall support from central government, including NHB and business rates, is anticipated to decline by 42.8 per cent by 2019, TMBC has set a £1.6million savings target by 2020/21.

    “It might also mean that services will simply need to be run with fewer resources. All these approaches will require a shift in culture for the organisation so that we can be focused and flexible in the way in which we deliver services to our communities,” said Mr Heslop.

    Savings of £400,000 have been earmarked

    for ‘service change and reduction’, with a £600,000 cutback from its external contracts. A quarter of a million pounds is also hoped to be found through structural changes in the organisation.

    The Director of Finance and Transformation for TMBC, Sharon Shelton, said: “To meet these new challenges, we have calculated that we need to set a new savings target of around £1.6m to be delivered over the next three to four years.

    “Having delivered savings consistently over the past few years to the tune of around £4m, this will not be easy and some difficult choices may need to be made. The Cabinet will begin considering options on how to achieve this over the coming months.”

    Overall the borough council will have a gross expenditure of £60.14miliion in the 2017/18 financial year, of which just over half (£35.3million) is spent on the provision of benefits and effectively paid for directly by the government.

    The remainder of the expenditure is funded by income raised from a mixture of sources, notably council tax, fees and charges for council services, and government grants – the latter of which has been greatly reduced since 2010.