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Somerset REFUSED permission to raise council tax rates by up to 11%

Paul JonesFebruary 10, 20260 Comment0

A PROPOSAL to raise council tax rates in Somerset by around 11% has been refused by the government – plunging the county authority into more financial uncertainty.

Somerset Council had requested flexibility to increase the tax by more than the 5% allowed by law without requiring a referendum.

However, the Ministry of Housing, Communities and Local Government (MHCLG) has refused Somerset’s request, meaning the authority will be limited to a 4.99% increase – unless it decides to proceed to a vote for residents.

The decision came after last year saw Somerset granted a 7.5% increase – at the time billed as a ‘one-off’ amid exceptional financial hardship.

But the burden has not lessened, with the council again returning to the government to ask for an even bigger increase for 2026/27 – which has been turned down.

Responding to the news, the council said it has made savings of at least £50 million since becoming a unitary authority in 2023, but that the financial situation “remains fragile”, with a budget gap of around £33m for 2026/27 due to “ongoing exceptional cost pressures in areas like social care, children’s services and homelessness”.

The council said its position was “made worse by Government’s decision not to financially recognise authorities which have a large geographical base to cover and whose population is rural”, with Somerset among the 10 most-rural authorities in the country.

Council tax levels also remain lower than the national average for similar authorities, the authority said.

But council tax is not the only means of the council receiving financial support – leader, Cllr Bill Revans (Lib Dem, North Petherton) is again in discussions with the MHCLG over possible Exceptional Financial Support – including a possible Capitalisation Direction, which allows councils to use borrowing or asset sales to fund day-to-day operations, like providing public services.

The move is intended as a one-off, yet Somerset Council is seeking the dispensation once again, having been granted one for 2025/26, with around £43m of such spending in the last budget.

And Cllr Revans said the council would now consider the implications of the refusal, which are “likely to require further damaging cuts to services and long-term changes”.

“Clearly no-one wants to increase council tax, but this announcement means Somerset will remain at a disadvantage due to historic decisions and we will continue to have less funding to deliver important services for our residents,” he said.

“We will face further difficult and heartbreaking choices about council services and charges.

“Government uses a notional Band D Council Tax figure of £2,060 to calculate funding entitlements for councils. We will remain below this level by more than £100.

“Government have shifted responsibilities to councils, but without giving us the ability to raise income to the levels needed, and without taking into account historic decision making by predecessor authorities.

“I have repeatedly said that council tax is not a fair way to pay for services like social care. This is not just my view – it was echoed by the cross-party Select Committee last year which called for urgent reform of a ‘broken’ system. Our residents continue to pay more and receive less.

“We received some good news on Special Educational Needs and Disabilities budgets with the Government committing to paying off 90% of historic deficits. We’ll need to see the detail and will continue to lobby for comprehensive reform of the SEND system.

“This week’s announcement on council tax gives us clarity and we will need to consider the implications carefully before we finalise our budget proposals for debate and decision at Full Council later this month.”

The decision, however, has been welcomed by the Somerset Conservatives, who submitted a letter signed by some 3,600 residents opposing the increase, which could have seen around £200 added to an annual household bill.

Councillor Diogo Rodrigues, Leader of the Somerset Council Conservatives, said: “Over 3,600 Somerset residents signed our letter, firing a clear warning shot at the Liberal Democrat administration, get your own house in order and stop wasting money before asking people to pay more.

“Those voices were backed by Ashley Fox MP, who stood with residents and was the only MP to publicly support this campaign. Together, that pressure has made a difference.”

Somerset Council Conservative group leader, Cllr Diogo Rodrigues, has welcomed the decision

Cllr Rodrigues said in 2025/26, residents were told the 7.5% increase was exceptional – and that many could not afford an even larger rise in council tax this time around.

“When you combine that with the pressure placed on city, town and parish councils to take on services Somerset Council no longer provides, the impact on households is obvious,” he said. “For many families, this was looking unaffordable.”

The Conservatives pointed to what it called “wasteful spending” by the Liberal Democrat administration, including £33 million spent on agency staff, assets sold at multi-million pound losses, and £20m for consultants to identify savings.

Somerset Council is facing a battle to balance the books, with a £73m funding gap for public services.

The government’s decision to refuse the 11% increase is a blow to authority’s budget plans as it hopes to stave off issuing a Section 114 notice – effectively declaring the council bankrupt.

But Cllr Rodrigues focussed on the impact on households in the county, and added: “This outcome gives Somerset households some breathing space. The responsibility now lies squarely with the Liberal Democrats to work at pace, deliver the savings and efficiencies needed, and put the council on a secure financial footing, without repeatedly turning to residents to cover up their financial incompetence.”

Gideon Amos, Lib Dem MP for Taunton & Wellington, said the move came after “intense lobbying” and “limited extra financial support for the county” from the government.

“Somerset Council has confirmed council tax will rise by no more than the 4.99% norm across the country following intense lobbying and the announcement of some limited extra financial support for the county by the Government,” he said.

“The news will come as a relief after a much higher tax increase was projected by the Government’s provisional settlement.

“After months of lobbying, I of course welcome the government announcing it is relieving councils of 90% of the special educational needs and disability debts they’ve been forced to build up and the additional funding for housing and homelessness in Somerset announced yesterday.

“But this is only help at the margins. This Government, by standing by their removal of the remoteness uplift show they really don’t understand the real issues faced here in rural Somerset. The result is a still underfunded social care system with council taxpayers having to bail out a system that requires two out of every three pounds of Somerset Council’s budget.

“I am still reviewing the details ahead of a debate in Parliament tomorrow.”

And MP Sir Ashley Fox (Con, Bridgwater), welcomed the decision, and said: “When the Government takes the right decision, I will say so. Blocking the Liberal Democrats’ request to push council tax above the 4.99% referendum limit is the right outcome for Somerset residents.

“Hundreds of people have written to me worried about the impact of a £200 hike on their household budgets, and this decision will bring real relief to families and pensioners already under pressure.

“The message to the Liberal Democrat administration is clear: stop wasting money and get a grip on the council’s finances. Independent auditors have already criticised the council for failing to put forward credible savings plans at pace, and residents should not be expected to pay more to cover up that failure.”

Across the border, North Somerset Council (NSC) has been allowed an extra 4% increase (up to around 9% on council tax bills).

And in Dorset, Bournemouth, Christchurch and Poole (BCP) Council has been granted permission to raise council tax by an extra 1.75%, taking the limit to around 6.75%.