“I AM angry. I am angry. I am angry.”
Those were the words of Somerset Council leader Bill Revans (Lib Dem, North Petherton) as the authority’s Full Council debated the 2024/25 budget – in a bid to address a £100 million funding gap.
Councillors gathered in Bridgwater this morning (February 20) to thrash out the council’s budget for the coming financial year – including a potential rise in council tax and possibly closing a handful of county recycling centres to balance the books.
After details of a possible reprieve for recycling centres was revealed – through the renegotiation of council contracts – discussion turned to the recommendations of Jason Vaughan, executive director of resources and corporate services.
Mr Vaughan laid out the finances of the council in pessimistic terms, telling councillors they could set a balanced budget, using reserves to plug the funding gap.
“In the current, coming year, 2024/25, there is an excess of reserves over the budget gap,” he said. “The council can set a legally balanced budget for the coming year.”
However, he issued a stark warning that next year the council could be faced with issuing a section 114 notice – effectively declaring itself bankrupt.
“Also, for 2025/26, there is a forecast budget gap of £103.9m – in excess of the forecast level of reserves,” he went on. “If that position turned out to be true, that would trigger a section 114, as the budget gap exceeds available resources.
“I am very concerned about the 2025/26 financial year and the ability to set the budget for that year, given the size of the budget gap.
“(Issuing a section 114 notice) is looking very likely, based on these figures, but there is still a lot of action left to take,” he added.
The council previously cited spiralling costs of social care, rising interest rates and a rise in the national living wage, combined with a cut in government grants, for soaring costs.
Cllr Liz Leyshon (Lib Dem, Street) told the meeting councils like Somerset “clearly need government support”, particularly after a requested council tax increase of 10% – which has to be granted by central government – was refused for the county.
“Government attention and support will be needed to save a wholesale failure of local authorities as they deal with the financial situation we have experienced and dealt with since 2020, including a global pandemic, inflation on energy costs and food, increases in the national living wage, a hot labour market and more,” she said.
Increased interest rates following the Liz Truss/Kwasi Kwarteng mini budget, and “partly as a result of that”, an increase in homelessness and the reduced value of commercial long-term investments, all contributed to the shortfall, she added.
“Councils of all colours and sizes across the country have budget gaps and maximum council tax increases,” she said.
“When government responded with additional monies, the increased amount for Somerset – of approximately £5m – has countered the increase in the national living wage, but no more.”
She said savings outlined in the OneSomerset proposal – which saw the county’s four district council merge to become Somerset Council – had “already been superseded”.
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“This council needs to go further and faster in transformation than envisaged in 2020,” she said.
Government funding, since 2013, had dropped from £80m per year to just over £8m, she told councillors.
“Underlying challenges for Somerset County Council then were the same as today, now magnified by the global pandemic and economic problems we have seen since,” she said.
“The move to unitary has brought reserves together but also brought together challenges of district and combined councils.”
She said government support for local authorities will be “critical”, but the “summary is bleak”.
Council tax in comparable counties, such as Wiltshire and Dorset, remain higher than in Somerset, she said.
“When you put all of that together, if we had Dorset’s council tax, there would be £53m a year more in our base budget,” Cllr Leyshon said.
“As the government agreed the move to one, unitary authority (and) the inherent problems of low council tax, the secretary of state set up a council to fail.”
She added: “It is not the budget any of us would wish to present. It is a budget and it is a balanced budget.”
Cllr Mike Hewitson (Lib Dem, Coker) is chair of the council’s Audit Committee.
He said: “Without a change in circumstances there can be no doubt the likelihood of this council having to issue a section 114 notice remains extremely high.
“Within five years, the council has to face a further £200m in pressures, many of which it has no control over.”
He said a “financial ticking timebomb has gone off”, with statutory costs – what the council is legally required to spend – set to overtake income.
“While the council is able to bridge the shortfall this year, many measures are non-recurring,” he added.
“It is unsustainable. The decision of (the Department for Levelling Up, Housing and Communities (DLHAC)) to refuse a reasonable request to raise council tax only delays the inevitable.”
“I’m sorry to be the harbinger of doom. To avoid a section 114 notice, we need the government, of whatever colour, to take action.
“That is not a party political statement.”
Cllr Gill Wren (Ind, Upper Tone) said the council was “on the brink” after the decision to refuse a 10% council tax rise.
“The decision to refuse the council tax increase, to me, was perverse,” he said. “Raising council tax would have given us more secure income going forward, but that has now been denied.
“If we do go to a section 114, the government will install commissioners and they will raise the council tax anyway, so what are supposed to be doing?
“This boils down to political will and there is a lack of it in national government to support local authorities.”
Cllr David Fothergill (Con, Monkton & North Curry) said the budget was not balanced as it relied on assurances in letters from the DLHAC.
“This is not a balanced budget, as you cannot count a piece of paper, a wing and a prayer strategy, to set this budget,” he said.
“There is a lot of question about how we can set a balanced budget on a piece of paper that has come from DLHAC and does not say what a lot of people want it to say.”
And Mr Vaughan had a stark message for councillors as they prepared to vote on one part of the budget.
“It is going to be absolutely critical that we deliver those savings (in the report),” he said. “If something goes wrong during the year, it could trigger a section 114.
“We are burning through our reserves. That is not sustainable.
“I can’t give members any guarantee we won’t issue a 114 at some stage. Our position is precarious.”
Cllr Sarah Wakefield (Lib Dem, Blackdown & Neroche), said: “We’ve heard a lot about how we need government attention and support, and we are passionate about that.
“I can assure you, we are very passionate and extremely angry about the position we find ourselves in. Becasue our speakers are calm and speak clearly about the position we’re in, it doesnt mean they dont care.
“We all worry about it all the time. Please don’t suggest we don’t care.
“We haven’t shrunk from the cause. It seems every avenue we’ve explored to get more money for our council has been closed to us.
“The revenue grant has gone down every year over a number of years. It’s impossible to make these numbers work.”
Green councillor Martin Dimery (Green Party, Frome West) said: “Nothing convinces me the position of this council is sustainable.
“We’ve been to the government, to receive a derisory contribution. The government was only too willing to support the conversion to a unitary authority, and the cuts, but not prepared to support us.”
“These are not cuts. We are seeing the systematic dismantling of local government in Somerset,” he added.
And Cllr Revans said before the vote: “This is not a local problem, this is a national problem. We are a case study of what is happening in councils up and down the country.
“That’s not an opinion of myself, but all the organisations that represent local government and the opinion of the cross-party committee for LUHAC.
“We need to recognise that this is a broken model of local government and we need to be making sure there is a cross party consensus on the future of local government.
“I am angry. I am angry. I am angry. What has been done to local government across this country is appalling. What has been done to local services in Somerset – that we are having to do – is appalling. Yes, it is appalling.
“But as I learned from 22 years in the classroom, you don’t get angry. You look for the solutions, you look for how you can deliver outcomes.
“Unless you protect as many services locally as possible, we are not fulfilling our repsonsibility.
“(Issuing a) section 114 will bring in commissioners to this county to run things, abdicating responsibilities of councillors.”
The motion was carried to approve the report on the 2024/25 budget.
Good balanced reporting – quotes from 4 separate Lib Dems and 1 Conservative. No attempt to address the wastefulness endemic within the council or to ask what the ruling junta is doing to drive efficiency rather than cut services. Anybody might wonder the Lib Dems think there is a General Election coming and this is a neat way to try and get more irrelevant Mps from their party elected.