Questions and answers
Your council tax is made up of two elements:
- Kingston Council expenditure - e.g. social care, waste collection, libraries
- Expenditure related to the Greater London Authority (GLA) which is called the GLA precept - eg Metropolitan Police, Transport for London, and the Fire Brigade.
In line with national government policy, we have taken the decision to support Kingston's vulnerable and ageing population by levying a social care precept of 3% and use a 1.99% increase in council tax to create a 'budget boost to protect the vulnerable'.
We collect council tax on behalf of the GLA, which is in the process of deciding whether to increase the rate on their share of council tax. It has proposed a rise of 1.46%; a decision on the rise will be made by the London Assembly in February.
Increasing council tax for residents is not an easy decision, but we continue to face reduced budgets and an increase in demand for our services every year.
Thanks to Kingston's ageing, growing population, the cost of providing adult social care is rising year on year. The cost of looking after each person is also increasing. The council tax increase is essential to meet those costs.
Council tax alone does not fund all our services. All councils receive additional funding from the Government called the Revenue Support Grant; ours has always been one of the lowest in London, which has meant we've had to charge a higher council tax to maintain vital services. Our government grant has gone down every year since 2010 and despite intense lobbying, from 2019 we will no longer receive any government grants and will have to independently fund all of our services using income from council tax, business rates and charges. Every council in the country is facing a similar challenge.
The Government has limited any rise in council tax to 1.99%, but it has introduced the option of levying an additional 3% precept to help fund adult social care. Since last year, when calculating the funding given to us, the Government has assumed that we will levy a precept each year to fund these services. In reducing our grant, the Government has not just given us the opportunity to raise money via the precept - it has assumed that we will increase this locally generated resource.
We take every opportunity to lobby the Government about the cuts to our grant funding, expressing the view that this continued shifting of the burden onto local taxpayers is unfair and unwelcome. This lobbying did result in some transitional funding being awarded in 2016-17, but it was for two years only and was far from being sufficient to plug the funding gap in its entirety.
Council tax is not a direct bill for services; you're paying for the cost of maintaining society's essential services and ensuring that we can support the most vulnerable among us. Approximately 95% of the population each only use around £350 of council services every year but the 5% of us most in need - the elderly, those with special educational needs and disabilities and the homeless - individually use an average of £25,000 of services a year.
In total, over 70% of our budget is spent on helping vulnerable people. Our single biggest expense is adult social care, which accounts for over 40% of our budget. Our growing, ageing population means there is more demand for adult social care than ever before. In the three years to 2015, Kingston's population grew by 5.9% (ONS), while the borough's population of people aged 75+ is projected to rise by 34% by 2030 (GLA).
The overall Government grant we receive in Kingston has historically always been low compared to most other London boroughs, because Kingston is seen by the Government as an area of low need. Every year, we argue that we should receive more funding.
As things stand, to meet the costs of providing vital local services, we need to raise more money through council tax. Our council tax would be considerably lower if we received a similar government grant to some of our neighbours.
The Government has highlighted some local authorities as having significant financial reserves, but we're not one of them; our reserves are among the lowest in London. Continually dipping into them to help cope with the pressures we're facing would not be a sustainable way to deliver a balanced budget. Reserves, like your savings, can only be spent once, so eating into them simply puts off the tough choices for the next year, when the financial situation is likely to be even worse. In general, reserves need to be kept aside to cover for unforeseen events and specific projects rather than business-as-usual budget planning.
Kingston Council has made over £60 million of savings in the past few years - about 40% of our total budget. We recognised some time ago that the combination of a reduction in funding and increased demand for services would present us with a significant challenge and last year changed our budget planning process so that it focuses on identifying the key outcomes for our residents - an approach we call outcome based budgeting (OBB). This change in approach recognised that our previous approaches would not achieve the budget reductions that we needed.
We are not legally allowed to set a budget that does not balance. If we did, the consequences would be hugely damaging to the people of Kingston - unelected civil servants appointed by central government would be drafted in to implement cuts to services with a lot less regard for local people and understanding of our borough. We are not willing to let that happen, and while we will continue to lobby the Government to continue investing in our local services, it is our responsibility to set a balanced budget to protect our residents from further damage.