Somerset Council tax bills could rise in financial emergency

Somerset Council declared a financial emergency in early-November, confirming it was currently predicting an overspend of £27m this year and a budget gap of £100m for next year.

To plug this budget gap, caused by both a rise in demand for care services and the rise in the cost of providing them, the council will have to make difficult decisions about cutting local services – or else effectively declare bankruptcy.

Council leader Bill Revans has begun reaching out to town and parish councils, using the recently-created local community networks (LCNs), asking them about what services they may be able and willing to run locally to reduce the unitary’s financial burden.

Somerset Council is restricted by law as to how much it can put up its council tax in a given year – the current restrictions being 2.99 per cent for general spending (spread across all services) and a further two per cent ring-fenced for adult social care.

Town and parish councils, by contract, have no such restrictions – meaning they can put up their council tax year on year as much as they like.

In a letter to town and parish councils, published on November 8, Mr Revans laid the blame for the current crisis at the government’s feet, arguing its failure to reform social care coupled with high inflation and reducing centralised grants had created “an enormous financial challenge”.

Bill Revans, leader of Somerset Council.

He also criticised the previous Conservative administration, led by David Fothergill – who had persuaded the move towards the new unitary authority – for freezing council tax for six consecutive years at the height of austerity, depriving the council of around £200m.

Mr Revans said: “Since the creation of Somerset Council, we have been committed to working with communities who want greater influence over local assets and services.

“We know that some city, town and parish councils have clear ambitions for devolution of specific functions and assets in their areas.

“We also recognise that not everyone is in the same position, and that while devolution conversations are seen as opportunities for some, they can be concerning for others.

“The scale of the financial challenge means we are rapidly having to review all of our activities and prioritise where our limited resources are deployed.

“Therefore, in order to protect many of the services our communities value, we intend to speed up the pace of devolution.”

The following services are among those which could be devolved to a local level as part of these conversations:

• Street cleaning, litter bins and dog poo bins
• Funding local bus services
• Grit bins and sandbags
• Grass cutting and hedge trimming
• Maintaining public rights of way
• Clearing drains and gully
• Minor highway repairs (e.g. pavement repairs)
• Public toilets
• Parks, play areas, allotments and closed churchyards
• Tourist services and local markets

The council is not planning to devolve county-wide high-level services such as children’s services, adult social care or waste collection.

However, local councils may be invited to make financial contributions towards more strategic local services, such as recycling centres, arts venues, libraries and leisure centres.

As part of its budget-setting, Somerset Council is currently reviewing its capital programme (which includes major road-building schemes and the upgrade of the Octagon Theatre) and its commercial investments programme – the majority of which was inherited from the former district councils.

Certain capital projects – such as the Yeovil Refresh, the levelling up projects in Bridgwater, and the town deals in Bridgwater and Glastonbury – are ring-fenced, meaning their funding (predominantly from central government) can only be spent on the specified regeneration projects.

Somerset Council is currently reviewing its capital programme, including the Octagon Theatre upgrade.

In the event that it cannot set a balance budget for the new year, the council will have to issue a Section 114 notice – effectively admitting bankruptcy.

In a separate letter to local residents, Mr Revans said: “This would mean that unelected, highly paid commissioners would come in to stabilise the council’s finances, selling off whatever they could, cutting all services except for those we legally have to provide, and raising your council tax.

“We are determined that these decisions should instead be made by locally elected councillors who know and love Somerset.”

Mr Fothergill, who leads the opposition Conservative group on the council, said the governing Liberal Democrats needed to take “a new approach” to these challenges.

Leader of the opposition David Fothergill.

He said: “It is deeply frustrating that the new administration has squandered the strong financial legacy that was handed to them after the election.

“A lack of any sense of urgency has led to a failure to maintain focus, a failure to keep key personnel in post and a failure to keep momentum towards financial sustainability. As a result, many unitary savings which were forecast and achievable have sadly not been realised.

“While it is clear that inflationary pressure on costs is having some effect, neighbouring Conservative-run Wiltshire Council is forecasting a balanced budget, with other comparable councils also balancing or working to resolve single-figure budget gaps.

“It is sad to see this financial crisis develop so quickly. The opportunities of moving to a unitary council have been wasted and the administration’s failure to maintain focus on costs and take necessary and appropriate actions will have a devastating impact upon people of Somerset.”

Councillor Martin Dimery, who leads the Green opposition group, added: “It is little surprise that the council is now facing a desperate and deepening financial crisis, with a real possibility of soon going bust.

“Local councils have borne the brunt of 13 years of the Conservative
government’s obsession with austerity. Furthermore, it should not be forgotten that the Liberal Democrats were complicit in promoting this policy when in Cameron’s coalition.

“The result is that we are now seeing the council desperately seeking to off-load properties and asking parish and town councils to relieve them of essential services like street cleaning.

“Our public services are on the point of collapse. Austerity is not the solution. There is nothing left to cut.

“The government which encouraged Somerset to become a single council now needs to step in with extra resources to enable Somerset not to fail at the first hurdle.”

The initial budget proposals, laying out which services will be cut or transferred to town and parish councils, will come before the council’s executive committee when it meets in Shepton Mallet on December 6.

The final proposals will be published before the subsequent executive meeting to be held in Taunton on February 7, 2024, with the full council meeting to set the budget in Bridgwater on February 20, 2024.

Each of these meetings will be webcast via the council’s official website for those unable to attend in person.