April news
Somerset Councillor for Frome North (Lib Dem) Learn more
by adamboyden on 25 February, 2024
At last week’s Full Council meeting, Somerset Councillors passed a budget and set the Council Tax for the forthcoming 2024/25 financial year, avoiding a Section 114 Notice.
The budget was approved by 52 votes (all Lib Dem, including me, one of your councillors for Frome North) to 9 against, with 31 abstentions). If we did not pass a balanced budget, the Council’s Chief Finance Officer would have had no choice but to submit a Section 114 Notice to the Government under the Local Government Finance Act 1988, effectively declaring bankruptcy, as some other councils have recently. To avoid this was some achievement.
But we have had a stark warning of significant challenges in the years ahead.
Described as a “budget to avoid a S114 notice”, councillors agreed to a range of measures to bridge a funding gap of £100m for 2024/25, including significant savings, increasing Council Tax by 5%, and using reserves (a council’s equivalent of savings). The proposals also include a ‘capitalisation direction’ of £36.9m – where councils are given permission by Government to borrow money or sell assets to pay for day-to-day running costs.
Please see here for more on the news, here for a pre-meeting discussion, and here for item 6’s finance report and item 11 ‘s reports on the budget setting and Council Tax.
Months ago, massive increases in the costs of social care (for elderly and disabled adults, and children, partly due to the Government’s aborted Fair Cost of Care initiative), higher inflation and interest rates, Government underfunding of the new council, previous County council tax freezes, a low Council Tax and tax base, and the disruption of reorganising five councils into one meant that Somerset Council had a £100 million budget gap for 2024-25. If this was not closed, the Chief Finance Officer would effectively declare bankruptcy by submitting a Section 114 Notice, meaning expensive Government commissioners come in, cut services and increase council tax with no democratic control. Somerset Council’s Lib Dem administration has worked to avoid this, by consulting the community on our priorities, working hard to make sufficient savings, going through the cross-party scrutiny process with councillors, asking Government for a capitalisation direction (which requires the sale of council assets and commercial investments), using reserves, and working with town/city/parish councils to devolve local services.
Many of the original savings proposals from officer teams were either withdrawn or changed to allow alternative funding models to be explored. These include savings linked to highways maintenance, RNLI lifeguard provision, school crossing patrols, and savings linked to democratic functions, such as Scrutiny. Some services will now be protected by working in partnership with City, Town and Parish Councils, including Somerset’s CCTV service and public toilets, and discussions continue to make this happen.
However, some valued services will be lost, and many staff will be made redundant in a necessary ‘transformation’ as set out in a detailed list of savings proposals in Appendix 7 to item 11 Appendix 7 – Detailed List of Savings Proposals.pdf (somerset.gov.uk).
A budget for 2025/26 looks extremely challenging, as you can only sell assets once.
It is not just Somerset – in a recent report the Levelling Up, Housing and Communities Committee pointed to systemic underfunding of local councils in England and called on the Government to fix a £4 billion hole in council funding now or risk severe impacts to council services and further councils facing effective bankruptcy. It called on the next Government to create a sustainable funding system for local authorities (as this one will not). Our MP Sarah Dyke has also been raising the issue effectively in parliament. The next general election will be your chance to elect a new Government that takes our vital public services seriously.
Somerset Council’s portion of Council Tax is again proposed to increase by £82.14 a year (4.99%) (see item 11 Appendix 16). Some parish and town councils have also increased their precepts to contribute more to saving local services or taking over local assets. Here in Frome North the parish precepts are increasing by the following amounts a year for a Band D property in 2024/25 (and % from 2023/24) (see Appendix 16C):
If you pay Council Tax but have a low income, you could be eligible for Council Tax Reduction – see https://www.somerset.gov.uk/benefits-and-payments/council-tax-reduction/.
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