Somerset Council leader reacts to funding announcement

SOMERSET Council leader Bill Revans has welcomed the news of additional funding for local councils but stressed it does not fix a fundamentally broken system and won’t be enough to fill a £100m budget gap for next year.  

The government announced extra funding to address the national problem of rising costs in children’s services and adult social care. For Somerset this extra funding is estimated to be around £5m.

Somerset Council is facing a budget gap of £100m for next year and cllr Revans said it will still need the government to agree to further support – including a request to raise council tax by 9.99%.

Cllr Revans said, “Any extra funding is of course welcome, but £5m will not help us overcome a projected budget shortfall of £100million for next year. We still have a broken model of local government finance and social care funding which needs to be addressed.

“We have explored all options to reduce our gap and it is clear we will need government approval to increase council tax and use capital funding to create a sustainable council.”

After declaring a financial emergency in November, the authority’s ability to respond has been hampered by a historically low council tax rate – 49th lowest out of 63 for unitary councils.

Earlier last month Somerset Council’s Executive agreed to formally request a 9.99% increase in council tax which would generate an additional £17.1m and take the average band D council tax bill in Somerset to £1,810 – still below the unitary average of £1,815.

To balance the 2024/25 budget the council also plans to use £36.8m of reserves (a council’s equivalent of savings – money for emergencies which can only be used once).

The remaining gap would need to be covered by asking government for a ‘capitalisation direction’. This would allow the council to borrow money or sell assets to fund day-to-day running costs.

As reserves and capital funds can only be used once, for future years the council will need to significantly reduce its budget. This will include a transformation programme to reduce the size of the organisation and its staffing so it can live within its means.

Final decisions to set a balanced budget for 2024/25 will be taken by full council in February 2024.