Cllr Mike Bell has written to the Prime Minister over council finances

Letter to Prime Minister calls for urgent changes to council funding amid ‘bankruptcy’ fears

Paul JonesJanuary 9, 20260 Comment0

THE Prime Minister has been alerted to “deep concern” among leaders in North Somerset that the proposed new funding formula for local authorities could “jeopardise essential services”.

Cllr Mike Bell, leader of North Somerset Council (NSC), has written to Sir Keir Starmer calling for urgent changes to the way councils are funded, warning the national policy is pushing bills up – while reducing government support.

You can read the full letter HERE

The Government, unveiling the new settlement, said it would tackle a system full of “regional divides, postcode lotteries, and substandard public services” and “make sure cash going to councils is shared out in a fairer way that follows needs”.

Before Christmas, NSC received its provisional funding settlement from government, indicating a drop of £18.6 million, with the authority estimating the changes could see the authority see more than £30m taken from local services over the next three years.

A key issue is the way government builds council tax into the funding formula.

In its calculations, government assumes every council can raise the same ‘notional’ (assumed) amount of council tax, based on a national average Band D figure.

For North Somerset, that assumed figure is £2,061 for a Band D property.

However, NSC’s current Band D charge (including the adult social care precept) is £1,794. That gap means the council is treated as if it has more income than it actually does, which reduces the funding it receives and piles more pressure onto council tax.

In is letter, Cllr Bell called on the Government to:

remove the notional national council tax figure from the funding formula, or allow councils to raise council tax beyond current limits
protect and increase ringfenced funding for adult social care using relevant, up-to-date data in the calculations
provide a recovery grant or guarantee to reflect the extra needs of North Somerset’s most deprived communities

“This settlement doesn’t just cut funding, it bakes in an assumption that councils like ours can raise more from council tax than we actually do,” Cllr Bell said.

“Government is effectively treating North Somerset as if we already charge £2,061 for Band D, when our charge is £1,794. That gap is then used to justify taking money away. The result is simple: less funding from government, and forcing local council tax up.

“We are doing everything we can to set a sustainable budget and protect the services people rely on. We are pressing ahead with transformation and efficiency, and we have already identified £16 million in savings for next year.

“Even after that, we are forecasting a £15 million gap, and we expect that to rise to £42 million in the following years.

“Nearly £2 in every £3 we spend already goes on adult and children’s social care. These are services we are legally obliged to provide, as laid down by Parliament, but which government does not fund.

“That leaves very little for everything else. Without urgent action from government, it will become harder to protect essential services.”

The concerns mirror those for neighbouring Somerset Council which, although the funding formula would see their allocation increase, has long campaigned against the methodology – and is potentially proposing an almost-11% increase in council tax rates to reach the national average.

Meanwhile, both NSC and Somerset Council continue to prepare budgets for the coming year.

Unveiling the new funding formula, Secretary of State Steve Reed (Lab, Streatham and Croydon North), said: “We are reforming the funding system that led to regional divides, postcode lotteries, and substandard public services for too many people.

“Our changes will make sure cash going to councils is shared out in a fairer way that follows needs.

“We want every family to benefit from our Plan for Change, and fairer funding means people will soon be able to see and feel the difference in their own local area.”

And Minister for Local Government, Alison McGovern, added: “It’s simply wrong that where you live determines the quality of services you get and ultimately determines your life – from birth to old age.

“These reforms end that injustice. By using up-to-date data and targeting funding to areas with greatest need, we’re reversing years of unfairness and unlocking opportunity in every part of the country.”