Earlier this month, the Lib Dem leader of Somerset County Council Cllr Revans wrote to all town and parish councils in Somerset about two things. Firstly, next year the new Somerset Council will (instead of the District Councils) be paying the parish and town councils their share of Council Tax (their precept), and it will do so in one lump sum in April 2023, instead of two payments, which should be better for parish and town councils’ cashflow. Secondly, Cllr Revans writes about the parish councils’ precepts in the context of the 2023/24 Somerset Council budget, and it is worth reading this in full:

‘On a less positive note, however, one of the most critical elements of our work for the new Council is establishing the first budget for the new Somerset Council and its Medium Term Financial Plan (MTFP).

Even before the turmoil in national government over the last few weeks, councils across the country were facing a funding crisis. There are three key issues for councils with care responsibilities. These are:

• the impact of inflation, which is eating into current budgets and reserves – the cost of
  our electricity bill for streetlighting is set to double for instance,
• the lingering impact of Covid-19 on people coming into contact with care services,with no further Covid grants from Government, and
• the challenge of recruiting and retaining staff to provide statutory services in a challenging labour market.

These are national issues: A report published last week by Local Government Futures and the County Council Network estimates that the 24 County Councils alone are facing nearly £600 million of unfunded pressures from inflation and rising demand this year. This is predicted to rise by a further unfunded pressure of £821 million next year. It is a time of unprecedented difficulty for local authorities.

This is certainly the case at SCC where we are projecting an overspend of £22 million this year, almost entirely due to the pressures identified above. Tight financial management and limits to discretionary spending has kept other parts of the SCC budget in check but this is a situation that could not have been foreseen when budgets were set in February.

We are aware that you are currently going through the process of setting your own budget, including consideration of your precepts. As an administration, our priority for the new Somerset Council over the coming months of budget setting will be to set a budget that protects the statutory care services that we provide to Somerset’s most vulnerable residents.

After more than ten years of austerity, council budgets are approximately 60% of their former value and demand for our services has continued to rise. That makes it more difficult to find savings quickly.

We are aware that the City, Town and Parish Councils in Somerset may choose to influence and control how some local services are delivered in communities and how assets are managed. The new Somerset Council will create opportunities for such councils to take control of more local assets, such as buildings and green spaces, where they wish to.

We cannot be definitive at this stage about the impact of the MTFP process, with the Chancellor’s statement on government spending delayed yet again, and we don’t yet know the outcome of the work to devolve assets and services to local communities. We believe, however, it is prudent for your organisation to consider how it can take steps to ensure it is financially resilient in the light of the new Somerset Council’s profound budget challenges and difficult decisions that may need to be taken.

You may wish to consider how you could participate in discussions around the protection of local services in the context of the new Somerset Council being limited in its ability to raise Council Tax. Of course, we do understand that as a local council you will also be affected by increases in energy costs and pay awards, no council is immune to these national issues. Whilst the issues regarding the budget and future funding are of real concern, I hope that this letter goes some way to explain what we doing to address this challenge in a timely manner, and our ongoing commitment to work with you to protect the services we provide to our residents.

May I take this opportunity to thank you for all you are doing to represent and support our communities throughout Somerset. We will stay in touch over the coming months as the position becomes clearer about how we can work together to maintain the level services our communities value.‘

There is commentary on this in the Leveller here.

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