A deal was done with the bank

Kent County Council has successfully negotiated with Barclays Bank to repay £50m of debt at a discount of £5.5m.

This debt was long term and had more than 40 years still to run. The £5.5m discount is an initial saving and, in addition, KCC will make net savings on its interest costs of £670,000 per year for the next 40 years. This equates to a saving of around £19.5m at today’s prices, and represents a significant saving to the taxpayers of Kent now and in future years.

In its new draft Strategic Statement, a vision for Kent over the next three years, the Reform administration sets out its ambition to reduce the KCC debt burden, and release more money back into front line services.

At more than £700m the authority’s long-term debt is significant. Whilst managing the repayments is possible, doing so inevitably takes away vital money from day-to-day frontline services with the current annual interest costs at around £32m a year.

Announcing the repayment of the debt at a meeting of KCC Cabinet today (Thursday), Deputy Leader of KCC and Cabinet Member for Finance, Brian Collins said: “Our successful negotiations with Barclays Bank represent a massive saving for the Kent taxpayer, and yet again shows that we are determined to make sound financial choices that put efficiency at the heart of everything we do.

“It is no secret that we are having to do more with less and that we continue to face huge financial challenges. This brave and significant move shows that we are not afraid to ask difficult questions, or to challenge the status quo and historic assumptions around the finances of KCC. We will continue our ruthless focus on how the authority’s money is spent, and use common sense to ensure that the residents and businesses of Kent are at the forefront of each and every decision we make.

“The enormous debt that KCC faces has built up over many decades, and is a result of decisions taken by previous political administrations. Servicing such debt impacts on vital services that residents need and deserve, so the huge savings made from this early repayment will ensure we can invest more back into frontline services.

“We are determined to turn this financial situation around, and continue to make sound choices that benefit everyone who lives and works in Kent.”

The Leader of KCC, Linden Kemkaran, appointed a new Cabinet team with special responsibility for Local Government Efficiency to systematically look at every penny KCC spends. This team is continuing to carry out a full examination of all KCC’s procedures and finances, driving down the debt burden by focussing on debt management, the sale of assets, and strict control of new capital expenditure.

Alongside this work to reduce debt and identify savings, the administration will continue to put pressure on Government to fund KCC at a level that properly recognises Kent’s unique needs.

As the Strategic council for the UK’s gateway to Europe, the pressure on KCC services is significant and unique, and this urgently needs to be acknowledged and better reflected in the support the Government provides to KCC.

Brian Collins added: “The Government needs to sit up and wake up to the financial crisis that continues to grip every local authority across the UK.

“In the meantime, we have to make every penny count, and use the common-sense approach of our DOLGE team to find efficiency savings and income generation opportunities. This debt repayment, and the long-term financial benefits it will bring, perfectly demonstrates our determination to leave no stone unturned to ruthlessly get spending under control.

“This repayment of long-term debt demonstrates our policy of sound fiscal financial responsibility.”

Source: Kent County Council
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