HOUSEHOLDS in Somerset could be faced with a 10% rise in their council tax to tackle a £100 million funding gap.
The increase is among “unprecedented” and “heartbreaking” proposals detailed by Somerset Council as it faces a huge funding shortfall for the 2024/25 financial year.
Plans have been published ahead of a meetng of the council’s executive on January 15, and also include cuts to services – including the closure of five recycling sites – rises in parking charges and reviewing contracts and IT.
Leader of the council, Bill Revans (Lib Dem, North Petherton), said the steps had to be considered after a financial emergency was declared last year, driven by “significant pressures” on social care and “broken” system for funding local government.
The authority’s ability to respond has been hampered by a historically low council tax rate – 49th lowest out of 63 for unitary councils – he added.
The proposals also include a plan to use reserves, significant savings, and the sale of council assets to set a balanced budget.
There are also options to spend less by reducing or stopping discretionary services in order to protect its essential statutory services, which could include CCTV, public toilets, theatres, leisure services, visitor centres and closing five recycling sites.
Where options are to stop services or greatly reduce funding, discussions will continue with parish, town and city councils, and community groups around options for services to be picked up by others rather than stop completely, Cllr Revans said.
“The funding model of local government is broken and our pleas for assistance have not yet been answered,” he added.
“Councils up and down the country are in a similar position and in Somerset we have been hit extra hard by cost inflation in care.
“This is what a financial emergency looks like. No decisions have been made, but all of these savings and the 10% council tax increase are unprecedented actions that have to be considered if we are to steer this authority through a period of extreme pressure.
“Officers have done as we asked and left no stone unturned. The result is a set of options, many of which are very unpalatable – some heartbreaking – that no one would want to take forward.
“Our Council Tax is one of the lowest among the unitary councils which have responsibility for care and we find ourselves having to consider putting it up by 10%. That equates to an extra £3.15 per week for the average household to limit the impact on core services, many of which support the most vulnerable.”
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Cllr Revans urged the public to take part in the council’s budget consultation, which runs until January 22 – the result of which will help influence councillors as they put the plan together.
In total, the executive meeting papers set out £35m of proposals.
Of those, £24m are new and will be referred to the council’s Resources Scrutiny Committee before any decisions are taken. Further consultations will be carried out on specific proposals where necessary.
At the January 15 meeting, the executive will ask Government for flexibility to increase council tax by more than the referendum limit to 10% (including the 2% social care precept).
This would generate an extra £17.1m and raise the average band D Council Tax bill to £1,810 – still below the unitary average of £1,815.
Cllr Revans went on: “We understand the pressure on everyone’s household budgets and have recently taken steps to ensure that we have a Council Tax Reduction and Hardship scheme in place to protect the most vulnerable in our community from any increase.”
To balance the 2024/25 budget, the council also plans to use £36.8m of reserves.
The remaining gap of around £20m would need to be covered by asking Government for a ‘capitalisation direction’, allowing 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, with a transformation programme planned to reduce the size of the organisation and its staffing.
Somerset council is sitting on over 200 million assets in properties in its portfolio,it’s obscene for this council to ask the tax payer for any further tax increases, without selling at least half of these assets to plug the gap that they have created.
Bad management and speculative buying has caused most of these problems, the money they have put aside for this speculation should have been spend on services for the community at the time.