Somerset Council warns boost in Government support isn't enough
Bill Revans is warning the extra £5 million 'does not fix a fundamentally broken system' in local government
The leader of Somerset Council has welcomed a further cash boost by the Government earmarked to provide crucial social care services.
Bill Revans says it means there'll be an extra £5 million - but is warning it's a drop in the ocean compared with its £100 million budget gap, and has stressed the money 'does not fix a fundamentally broken system' in local government.
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.”
Somerset Council declared a financial emergency back in November.
Since declaring this, the authority has been working to reduce what's currently a £100 million black hole in its budget for the next financial year.
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 this 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 - however, this cash 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 the next financial year will take place in February.
You can read more about the Government's latest announcement here: Government announces a further £600 million boost for councils