As reported, Somerset Council is in a financial crisis. Given the causes and the threat to important services (both outlined below), the government needs to provide more funding.

Next year’s local government financial settlement for 2024/25 will be announced in mid-December.

Services under threat

Internal controls and reviews have reduced Somerset Council’s budget gap for 2024/25 from £100m to £87m.

After seeing what government-appointed commissioners have done at other councils where bankruptcy has been declared (by issuing a section 114 notice), it is now proposed to take the same actions in Somerset to try to avoid a bankruptcy declaration here.

In addition to savings previously announced, a report, to be presented to the Executive on 6 December 2023, lists areas where service cuts and cost savings are now being sought in Somerset:

  • Efficiency savings including by reducing the use of consultants, selling council buildings, transforming IT infrastructure, reducing staff benefits and seeking external funding and grants.
  • Councillor costs reduced by having less meetings, fewer executive leads and less training.
  • Harmonising service standards to remove inconsistencies, such as the maintenance grants paid to parish and town councils in the former Somerset West and Taunton district (includes Upper Tone).
  • Increasing fees and charges including for parking, planning fees and collecting garden waste.
  • Adult social care spending reductions on some preventative services and reviews of fees and charges to reflect costs.
  • Children’s services reductions may include elements of early help, careers support and educational psychology support.
  • Community service reductions include CCTV, library services, leisure provision, management of parks and beaches, and support for theatres, visitor centres and heritage services.
  • Highways service levels reviewed including maintenance of ditches, grips, drains, gullies, grass and hedge cutting, weed treatment, road markings, signs and paths. Also reductions in support for active travel, (cycling and walking), school crossing patrols and community-based highways safety.
  • Public transport reductions in subsidies for buses, concessionary travel and park and ride.
  • Recycling centre closures, reduced hours and permits to restrict use to Somerset residents.

All deliverable savings may need to be taken, but this is still not expected to be enough to close the budget gap for 2024/25. In addition, it is expected to use reserves (then reduced to a minimum which is high risk) and to have government agreement to cover the rest of the revenue gap from sales of capital assets, such as council property (called capitalisation). Using reserves and capital to cover annual revenue costs just buys time, as once spent they are gone and cannot be used again.

Further cuts to create a smaller council

Even with all the savings above, further cuts and more radical changes to Somerset Council are expected to follow. A new vision for the council is being proposed that is smaller and leaner, employs fewer people and focuses only on the “unique value” that the council can provide. This will include building strategic partnerships with communities and partners. More work will be automated and staff who continue will focus on work that is complex, unique, problem solving and involves connections with people. There is no published detail yet on how small and lean this new Somerset Council would be and on the extent of further cuts to public services.

It is proposed that all services will be provided at statutory minimum levels and remaining discretionary services will need to generate income to break even. For some services, legal requirements should be clear. Others are less well defined and so it will need to be seen what specific cuts are proposed and what service levels would remain.

Somerset Council has contacted all parish and town councils to ask if they wish to help support or take on the delivery of any services in their areas. In addition to threatened services listed above, this devolution could include street cleaning, managing open spaces, climate change initiatives and some local flood response measures.

Changes to council services will be subject to consultation over the coming weeks, with details to be announced. However, the reality is that these changes are being made in a desperate hurry to meet budget-setting deadlines and the situation is a near unplanned mess. Many are now working hard to make the best of it, but this will be difficult.

There will be further reports to the Executive, to Corporate and Resources Scrutiny Committee and to Audit Committee, before final budgets and reports on Council Tax setting are taken to a full council meeting on 20 February (and, if needed, on 28 February). We should know then whether Somerset Council can avoid issuing a 114 notice to declare bankruptcy. Whether or not the notice needs to be issued, it currently looks like it will be a sad day for public service provision in Somerset.

Problem roots and moving forward

The roots of the current problems lie in austerity policies from 2010, started by the coalition government, with steep reductions in government funding to local authorities. At the same time, there was a freeze in Council Tax by previous Conservative and Liberal Democrat administrations in Somerset from 2010 to 2016, which has reduced the annual funding raised ever since.

The trigger for the current crisis has been escalating service costs over recent years, especially for social care, which make up nearly two-thirds of councils spending. This share is rising as care costs continue to grow.

All of these problems are worse for Somerset due to a failure by national government to introduce fair funding for local government (1), Somerset’s ageing population (2) and below average Council Tax (3).

Other factors that have contributed to the current mess are:

  • The timing and complexity of the change to a unitary council, which Somerset Conservatives promoted and government enabled.
  • The risky investments in commercial property around the UK by previous Somerset district administrations (Liberal Democrat and Conservative), which are now to be sold at a substantial loss (their capital value had reduced by £60m to £220m in March, with the original capital costs financed by borrowing).
  • The government imposed cap on the level of Council Tax that can be set. Last year the cap was 4.99%, which was well below the level of inflation. The government cap also means councils cannot make up for freezes set in the past.

Only government help can now avoid the worst of the cuts and changes that threaten Somerset services. Ask our MPs for their support.

Green Councillors on Somerset Council will aim to do what we can to avoid and minimise harm from the impending savings and to make the best of the situation moving forward.

In the longer term, the UK needs a tax system that ensures the rich and wealthy pay their fair share, as well as those damaging and polluting our environment. The Conservatives are taking us in the wrong direction and we will all end up paying the price. We desperately need a change in direction towards a greener and fairer future.

Further information:

(1) Delay to fair funding review and business rates reset

(2) Somerset Trends – Our Ageing Population

(3) Financial Strategy Update – Report to the Executive, 8 Nov 2023 (see paragraphs 42-48)

UPDATE (19 Dec 2023): The Government has not helped to provide fairer funding for Somerset. The local government financial settlement has been announced. Somerset’s share is below the average and £3.9m less than forecast – see BBC report.

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