Councils in Kent and Surrey insist they are not facing bankruptcy

Leaders of two councils in south-east England have said they are not on the brink of bankruptcy.

Kent County Council (KCC) said it was facing "extremely tough savings decisions" after the authority was told it must save £86m over the next year.

Spelthorne Borough Council (SBC) said it "comfortably" covered its loans and said it was not in financial trouble.

Bankrupt Birmingham City Council recently curtailed its spending by issuing a section 114 notice.

Credit ratings service Moodys estimated that SBC, in Surrey, has the biggest debt-to-income ratio of all English councils.

Spelthorne borrowed £1bn to buy office buildings, but it says an annual return of £50m comfortably covers the loan costs.

A statement from SBC said: "With an increasing number of local authorities declaring bankruptcy, speculation has been rife as to whether Spelthorne is at risk of joining this growing queue. The answer is categorically 'NO'."

KCC said in a statement: "KCC is not one of those local authorities that is having those conversations with central government, and we remain confident that we will not have to."

The authority's leader, Roger Gough, will be setting out plans next month for making efficiencies without dipping into reserves.

The council said funding from government was going up by less than inflation, making "extremely tough savings decisions not only inevitable but urgent".

"Our finances are under enormous pressure, as we endeavour to keep critical frontline services running in the face of sharply rising costs and increasing demand, particularly in social care," the council said.

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