By Local Democracy Reporter Daniel Mumby
Somerset Council may have to “look long and hard” at making further cuts to local services if further central government support cannot be provided.
In order to set a balanced budget for the last two years, the council has been reliant on “exceptional financial support” from central government in the form of a capitalisation directive.
This directive allows the council to fund day-to-day spending from the sale of land, property and other assets – something which is not normally permitted.
The council is currently forecasting an overspend of just over £5.4m for the current financial year, with many of the proceeds of recent asset sales being funnelled into the next phase of its transformation programme.
But the council’s interim chief financial officer has warned that further support from central government may be needed in 2025/26 – and if this is not provided, that the council will have to “look long and hard” at making cuts or dipping into its reserves.
Conservative councillor John Cook-Woodman, shadow portfolio holder for economic development, planning and assets, raised the issue when the council’s executive met in Taunton on Monday 8TH September.
“Going forward, what’s the plan if we don’t get a capitalisation directive, in terms of balancing the budget?” he asked.
Clive Heaphy, the council’s interim chief financial officer, said that discussions about the authority’s finances were ongoing with the Ministry for Housing, Communities and Local Government (MHCLG).
He said, “We’ll continue to work with the government towards stabilisation.
“What the government will expect is, having had two years of exceptional financial support now, we can start to demonstrate that we’re starting to manage our budgets within the overall levels of income – that is, that our income and expenditure match.
“That does not rule out that we may need some further support, and in fact I’ll be having discussions with MHCLG this week.
“Should it not be forthcoming, I think we’ll have to look long and hard then about the cuts we need to make and the reserves we have in order to balance the budget.
“But undoubtedly here we’re on a journey that’s going to take a number of years, and it won’t happen overnight.
“We’ll be still making the case that, should we need exceptional financial support for next year (and that case is not proven one way or the other yet), that it should be available to us.”
The projected overspend of £5,409,000 for the current financial year is being predominantly driven by rising demand for children’s and adults’ services.
In children’s services, an overspend of £3,633,000 is forecast, primarily resulting from high-cost residential placements (including those in which children have to be placed in care outside of the county).
In adult social care, the projected overspend of £1,893,000 mainly results from a rise in the use of temporary accommodation – something the council is attempting to offset by using around £3.4m to purchase up to 15 properties to provide temporary accommodation to local families.
A further update on the council’s budget is expected to come before the executive committee before Christmas.
Pictures by Somerset Council at the executive committee on 8th September
Above Councillor John Cook-Woodman (Conservative, Highbridge and Burnham South). Below: Interim chief financial officer Clive Heaphy
