COUNCIL tax bills in Somerset could rise by ten per cent from April as the unitary authority seeks to avoid bankruptcy – with numerous key services on the chopping block.
Somerset Council declared a ‘financial emergency’ in November 2023 in the face of significant pressures on children’s services and adult social care, coupled with high inflation and the “broken” system of local government funding.
The council has made various attempts since this date to reduce both its projected in-year overspend and its budget gap for 2024/25 – which currently stand at £18.3m and £87m respectively.
But with little room left for manoeuvre, the council has published its initial budget proposals, which include raising council tax by twice the current legal limit. The council has also laid out a raft of measure designed to save money – including the closure of some libraries and recycling centres, further increasing car parking charges, shutting all public toilets and laying off large numbers of its staff.
Council leader, Bill Revans, described the situation as “unprecedented” and “heartbreaking”, but said they had no other option.
Here’s everything you need to know:
Why is the council in such a difficult position?
The vast majority of local authorities across the UK are experiencing huge financial difficulties caused by a number of factors. Brexit and pressures in the job market have made it hard to recruit social workers, carers and other vital staff, forcing the council to pay extra to secure agency staff.
The war in Ukraine and the ensuing rises in inflation has pushed up the cost of construction projects, along with cost of heating and keeping the lights on at the various council premises. The coronavirus pandemic has cast a long shadow, with rising numbers of children presenting with complex needs and requiring additional support after missing significant time at mainstream school.
Somerset already has an ageing population, meaning large amounts of the council’s funding go towards social care for vulnerable and elderly adults. But the cost of providing this care has soared following the government’s aborted ‘open book’ exercise, which revealed the cost of providing care in Somerset to many of the major UK-wide providers – giving them a reason to push up their costs.
Bill Revans said, “The funding model of local government is broken and our pleas for assistance have not yet been answered. Councils up and down the country are in a similar position and in Somerset, we have been hit extra hard by cost inflation in care.”
How much could my council tax rise by in April?
Somerset has traditionally enjoyed a relatively low rate of council tax, ranking 49th out of 63 unitary authorities.
At the height of the coalition government’s austerity programme in the 2010s, the Conservative administration on Somerset County Council froze council tax for six years – something the current Liberal Democrat administration has frequently criticised, saying it has led to less money for local services.
Under current government rules, local authorities can only raise their council tax by a maximum of 4.99% each year – 2.99% for general services, and 2% ring-fenced for adult social care.
If a council wishes to raise council tax by a higher amount (such as the 10% being sought by Somerset Council), it has to hold a referendum of local residents – something which takes time, costs money and does not guarantee the result the council may want.
The government has allowed higher-than-normal council tax rises in a number of local authorities in recent years, including Slough, Thurrock and Woking. However, these rises were for authorities which had already issued Section 114 notices, and formed part of commissioners’ efforts to fix the problem. [A Section 114 notice is issued by a council’s chief finance officer to warn that the council’s expenditure will likely exceed resources available].
Somerset Council’s executive will make a formal request to the Department for Levelling Up, Housing and Communities (DLUHC) to allow it to raise council tax by 10%– twice the legal limit, of which 2% would still be ring-fenced for adult social care.
Such an increase, the council claims, would generate an extra £17.1m and raise the average band D Council Tax bill to £1,810 a year – still below the unitary authority average of £1,815.
Bill Revans said, “Our council tax is one of the lowest among the unitary councils, which have responsibility for care, and we find ourselves having to consider putting it up by 10%. That equates to an extra £3.15 per week for the average household to limit the impact on core services, many of which support the most vulnerable.
“We understand the pressure on everyone’s household budgets and have recently taken steps to ensure that we have a council tax reduction and hardship scheme in place to protect the most vulnerable in our community from any increase.”
What services are going to be cut?
Merely raising council tax by the maximum amount will not be enough to close the budget gap. In addition to this and the sale of surplus land, property and commercial assets, the council has published £35.2m savings options with non-statutory services being pared back.
Some of the savings will not directly impact local residents, such as reviewing IT and internet contracts – something which would have happened anyway as the new unitary authority took shape.
The largest single saving will come from staff redundancies, with the council seeking to save £4m by April 2025 and a further £4.4m the following year.
Five of the most highly-paid officers have already left the organisation as part of the ongoing transition, with the full council approving more than £960,000 of redundancy payments shortly before Christmas.
But numerous front-line services will still take a huge hit, with the following being among the changes which are being proposed:
• Closing five of the 16 household waste recycling sites (to save up to £963,000 by April 2026)
• Making efficiency savings in the school transport service (£825,000)
• Abolishing the council-run CCTV services across Somerset town centres (£652,000)
• Increasing car parking charges with inflation (£400,000)
• Closing some libraries by 2026 (£380,000)
• Closing all public toilets (£301,000)
• Restrict recycling sites to Somerset residents by introducing a permit system (£235,000)
• Review supported accommodation for vulnerable residents to ensure the providers deliver value for money (£200,000)
• Increasing the cost of using the Lifeline service (£195,000)
• Keeping the Octagon Theatre closed until the new business case is approved (£174,000)
• Installing no new play equipment until mid-2025 (£168,000)
• Closing the Yeovil Recreation Centre (£165,000)
• Cutting funding for grass cutting and gully clearing (£150,000)
• Scrap four new staff to support children with special needs (£132,000)
• Ending ongoing subsidy to the Brewhouse Theatre in Taunton
• Ending school crossing patrols (£41,000)
• Ceasing to lock Blenheim Gardens in Minehead, Wellington Country Park in Wellington and Vivary Park in Taunton at night (£15,000)
Could some services be run more locally?
Since the financial emergency was declared, the council has been in discussion with town and parish councils (and Wells City Council) as to whether any of the services on the chopping block could be devolved to a more local level.
Unlike the unitary authority, town and parish councils have no limit on how much they can raise their council tax by each year. It may also be the case that voluntary groups could take on services once delivered by the council – at least as a temporary measure to ensure they do not cease altogether.
Bill Revans stressed, “No decisions have been made, but all of these savings and the 10% council tax increase are unprecedented actions that have to be considered if we are to steer this authority through a period of extreme pressure.
“Officers have done as we asked and left no stone unturned. The result is a set of options, many of which are very unpalatable – some heart-breaking – that no-one would want to take forward.”
What else is being done to balance the books?
Even if all the savings are realised and the government allowed for such a sharp rise in council tax, that will still leave a budget gap of around £50m.
Up to £20m will be raised by selling off surplus land, buildings and other assets currently within the council’s ownership, along with the bulk of the commercial investments which it inherited from the four district councils.
The land could include regeneration sites, such as the Firepool site in Taunton and the Saxonvale site in Frome – with discussions about the future of the latter currently going on behind the scenes following a judicial review.
The three battery energy storage sites are also being reviewed, with former council leader David Fothergill reporting in December that the proceeds from selling these sites off could be used to restart the £30m regeneration of the Octagon Theatre in Yeovil.
The remaining gaps in the budget would be plugged using £36.8m of reserves – with reserves being used to balance both the current year’s budget and the 2024/25 proposals. Since reserves and the sale of assets can only be used once, the council will have to “significantly reduce” its budget in the coming years – no easy task as demand for core services continue to rise.
To mitigate this, a transformation programme will be carried out to reduce the size of the council and staffing numbers, similar to programmes carried out at Somerset West and Taunton Council and South Somerset District Council.
What is the time-scale for all this?
The council’s executive committee met in Taunton to discuss the budget proposals on Monday 15th January.
The public consultation on the budget will close on Monday 22nd January, with the responses being used to shape the final recommendations which will go before the full council.
After being reviewed by the audit committee on Thursday 25th January and the corporate and resources scrutiny committee on February 1st, the executive will reconvene on February 7th – by which time a further update on the budget proposals will be available.
The final budget will be debated by the full council in Bridgwater on February 20th from 10am. Each of these meetings will be live-streamed via Microsoft Teams for those unable to attend in person.