Somerset Council faces £100 million shortfall: Potential tax hikes and service cuts on the horizon

By Laura Linham 31st Oct 2023

County Hall in Taunton
County Hall in Taunton

Somerset Council is grappling with a financial crisis as it contemplates measures such as selling properties, raising council tax, and cutting services to address a £100 million budget deficit.

A key concern is a projected £70 million increase in adult social care costs for the year 2024/25, which will be presented at the authority's executive meeting on November 8.

The figures indicate that the council's reserves are insufficient to bridge the gap for the next fiscal year. Failure to act could lead to the issuance of a Section 114 notice by next February, which is effectively a declaration of bankruptcy.

Cllr Liz Leyshon, the lead member for resources and deputy leader at County Hall, said, "The funding model for local Government is clearly broken, with many councils struggling in light of soaring costs and demands on services. Here in Somerset, we're simply running out of money due to the soaring costs of demand-led services, particularly the costs of residential and nursing care for adults."

Previously, the council had warned of the need to dip into reserves to balance this year's budget. Current data reveals a £27.3 million gap for this financial year, with next year's shortfall projected to hit £100 million. This shortfall far exceeds the council's reserve levels.

The main issue driving this crisis is a £70 million hike in adult social care expenses. While proposed national policy changes aimed to make care costs fairer, they were later abandoned by the Government. Despite this, the costs of residential and nursing care in Somerset have risen significantly.

Officers are now drafting savings proposals which will be presented to the council's executive for a vote in December.

These proposals may include selling council assets and buildings, increasing council tax, as well as reducing services.

Cllr Leyshon added: "Our priority will be to maximise all opportunities, work with partners and do everything we can to ensure we can continue to take care of those most in need. It is our intention to take the difficult decisions now and to set a direction for the new Council with the benefit of our local knowledge and commitment to Somerset."

     

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