Somerset Council will be able to set a balanced budget for 2026/27 – but has been warned it remains on the government's "naughty step" due to its reliance on exceptional financial support.

At an all-day executive meeting in Taunton on Wednesday, 25 February 2026, councillors provisionally approved the authority's annual budget, which will go before full council for final sign-off on Wednesday, 4 March at 11am at the Canalside conference centre in Bridgwater.

The budget includes a 4.99 per cent rise in Somerset Council's share of council tax bills and a third successive year of exceptional financial support from the Ministry of Housing, Communities and Local Government (MHCLG).

Clive Heaphy, the council's interim chief financial officer, said this would be the final year of such support, warning the authority would not receive a fourth year unless there was direct government intervention.

"It's critical the council now takes real ownership of its decision-making," he said. "We won't be getting a fourth year of exceptional financial support. If it did, it would be with government intervention."

He added: "The government is clearly saying: 'you're on the naughty step, and you've got still get more work to do'. But the fact that they're minded to support us financially means they recognise that we're on the right trajectory."

The council will receive £30m of exceptional financial support for 2026/27, re-profiled from the previous year rather than additional funding. Of this, £25m will cover the budget gap and £5m will fund the ongoing transformation programme aimed at cutting future costs.

Mr Heaphy said Somerset was among the top ten most rural authorities in the country, with nearly half its population – around 290,000 people – living in rural settlements. He also highlighted an ageing population and rising demand for services, particularly in special educational needs and disabilities (SEND).

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The Department for Education has confirmed it will write off up to 90 per cent of the council's dedicated schools grant deficit, provided plans are put in place to control future SEND spending. Mr Heaphy cautioned: "Don't see this as free money: it's not."

The government has also indicated it has "significant concerns" about the pace of the council's transformation programme and plans to carry out an external assurance review.

Deputy leader Liz Leyshon said council tax for a Band D property in Somerset was likely to remain lower than the national average and lower than neighbouring areas in the south west, although the tax base is expected to grow.

Around 12,000 homes across Somerset remain delayed by the ongoing phosphates issue affecting development near the Somerset Levels and Moors.

Councillor Richard Wilkins, portfolio holder for transport and waste services, said rurality increased the cost of road repairs and responding to major incidents, including recent flooding and damage caused by Storm Chandra.

The full council will make a final decision on the 2026/27 budget on 4 March.

Reporting by: LDRS/Daniel Mumby

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