Somerset Council Seeks Permission for Higher Council Tax Increase to Address £54m Budget Shortfall

Residents of Somerset may experience a larger rise in their council tax obligations for the upcoming year, pending approval of a specific request by the local council. Somerset Council has formally requested the government’s authorization to increase its portion of council tax beyond the standard 5% limit. This action is intended to address a £54m deficit projected in its budget for the forthcoming financial year. On Monday, the Liberal Democrat executive committee endorsed a proposal for the council’s leader to communicate with the minister for local government. This decision followed a recent policy declaration concerning local government finance settlements made last week. The council currently benefits from an existing agreement with the government for exceptional financial assistance, covering the ongoing 2024/25 financial year. In November 2023, Somerset Council announced a ‘financial emergency’, necessitating the identification of £100m in savings and reductions to achieve a balanced budget for 2024/25. This involved obtaining government authorization to allocate £76m, generated from the sale of council buildings and investment properties, towards operational day-to-day services and funding redundancy packages for hundreds of employees. Presently, 450 positions within the authority are subject to potential compulsory redundancy, with a consultation period ongoing until the end of the current month. Earlier this year, 195 employees opted for voluntary redundancy. The council now reports confronting comparable difficulties for the 2025/25 period, citing an £88m budget shortfall, with £54m still needing to be addressed following the identification of an initial round of savings. These initial savings comprise £34m derived from salaries, achieved through the ongoing redundancy process, and almost £4m from modifications to the council tax support scheme, which provides reductions for households with low incomes. Additionally, nearly £4m in savings has been identified from an adult social services initiative named ‘My life, my future’, which the council states was “allowing people to maintain or increase their level of independence”. The council aims to address a portion of the outstanding £54m by raising its contribution to residents’ council tax bills by more than 5%, an action that typically mandates a referendum among local inhabitants. During the executive committee meeting, it was noted that councillors were of the opinion that the authority might be eligible for a greater council tax increase, given the exceptional financial assistance it is currently receiving from the government. A motion was approved to investigate the justification for increasing Somerset Council’s council tax beyond the referendum threshold, citing its “exceptional” financial circumstances.