As the statutory deadline of March 11 approaches, Somerset Council is hard at work finalizing its balanced budget for the 2026/27 financial year. Like all UK local authorities, the council must set a budget that balances income and outgoings, often leading to council tax rises to meet funding gaps.
Somerset Council remains in a “fragile” financial position, confronting an anticipated £73 million budget shortfall. Councillors and senior officers are actively exploring various proposals to close this gap, including negotiations with government officials and local MPs for greater and fairer funding following the recent local government funding settlement announced before Christmas.
While full budget details will only be revealed by the end of January, ongoing discussions suggest a challenging path ahead. The pivotal full council meeting is scheduled for February 25 in Bridgwater, where final decisions will be made.
Council tax in Somerset is made up of several components: Somerset Council, local town or parish councils, Avon and Somerset Constabulary, and Devon and Somerset Fire and Rescue Service. By law, Somerset Council can increase its portion of council tax by up to 4.99% annually without triggering a referendum. Within this increase, 2% is specifically allocated to adult social care, leaving 2.99% for other core services such as children’s care, waste collection, and infrastructure maintenance.
Somerset’s relatively low council tax base limits its ability to generate revenue compared to similar unitary authorities like Cornwall, Dorset, and Wiltshire. In response, last year’s council tax rise was permitted at 7.49% without a referendum, reflecting this disparity. Current negotiations with central government are ongoing about whether Somerset might again be allowed a discretionary increase, with council leaders revealing illustrative figures as high as 10.99% have been proposed to ministers.
Final council tax decisions will go through scrutiny committees before full council approval, but the government’s ruling on above-referendum increases remains uncertain. As Dave Benson Phillips might say, “It’s going up… but to just how high?”
In addition to Somerset Council’s share, town and parish councils also plan increases, with no legal cap on their rises. Some have already implemented significant hikes to align with devolution deals that transfer responsibilities from county level to local councils. For example, Bridgwater Town Council will manage Northgate Docks post-regeneration, while Yeovil Town Council will oversee the Octagon Theatre’s reopening. This trend is expected to continue, so residents should watch for changes in their local council tax bills starting April.
In early December 2025, Somerset Council’s executive committee proposed additional savings estimating £20.2 million in 2026/27 and another £4.76 million by 2030/31. Uniquely, many savings will come from increased fees and charges rather than service cuts. For instance, 624 holiday lets will now pay commercial rates for waste collection, generating roughly £130,000. Costs for registry office weddings and wedding certificates will rise, expected to bring in an additional £84,000. Garden waste bin charges could add £155,000, while commercial income from ventures like the Port of Bridgwater and Ham Hill visitor centre is budgeted to increase by around £120,000.
The government’s so-called ‘exceptional financial support’ allows Somerset Council to use income from asset sales to fund day-to-day services—a departure from standard accounting practices prohibiting this. Having relied on this support for the past two years, the council is applying for a third year, though asking for a reduced amount. This support hinges on the sale of inherited commercial investments and non-operational assets like agricultural land and under-utilized buildings.
However, confirmation of this funding may come shortly before the budget meeting. Without clarity, the council must prepare alternate plans to ensure a balanced budget.
Somerset Council sets two budgets: the revenue budget, covering daily operational expenses funded primarily by council tax, and the capital budget, dedicated to infrastructure and development funded by government grants, developer contributions, asset sales, and borrowing. The council holds millions in government grants tied to regeneration projects, including the Bridgwater Health and Social Care Academy, Tonedale Mill regeneration, and Yeovil’s Octagon Theatre refurbishment. Transport upgrades, such as improvements to the Edithmead roundabout near the M5, also rely on these funds.
Rising construction costs and potential legal hurdles may delay some projects. Meanwhile, the ongoing Life Factory scandal in Glastonbury underscores the council’s need for strict oversight to maintain government funding credibility.
Residents should prepare for council tax rises and increased charges, with key budget decisions set to unfold over the next few weeks as Somerset Council navigates a complex financial landscape.