North Somerset is undergoing a significant period of transformation. Key projects like the restoration of Birnbeck Pier and the reopening of the Portishead railway are well underway. Meanwhile, the Tropicana is being reinvented as a nationally significant venue, and the Banwell bypass is finally progressing after a century of delays.
At the helm of these ambitious initiatives is North Somerset Council — which, paradoxically, has raised council tax by an exceptional 8.99% and recently issued warnings about the risk of financial insolvency. So, how is the council managing to fund such large-scale regeneration amidst daily budgetary pressures?
The answer lies in understanding the dual budgeting system inherent to UK local government finance: the revenue budget and the capital budget.
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Each February, councils set two separate budgets for the coming financial year. The revenue budget covers routine expenditures such as staff salaries, maintaining services, and operational costs. This is funded by ongoing revenue sources like council tax, government grants, and fees (for example, parking charges).
Much of the revenue budget supports essential services like waste collection, pothole repairs, and library management. However, over recent years, a growing portion — approximately £62 out of every £100 spent — is allocated to social care, especially for vulnerable children. These costs are both significant and unpredictable, often causing overspending when demand surges unexpectedly. Coupled with reductions in government funding, this has severely strained North Somerset’s ability to meet its day-to-day obligations.
Council leader Mike Bell candidly expressed this challenge ahead of the budget-setting meeting, stating, “We will be asking you to pay more and you will be getting less services.” Following this, the council approved both the tax increase and tough measures like closing two libraries and reducing black bin collections to a three-week cycle, saving an estimated £1 million annually. Concurrently, efforts continue to “transform” services to operate more efficiently and cost-effectively.
In contrast, the capital budget finances one-off infrastructure investments and major projects. North Somerset Council has excelled in attracting external funding—whether from the government, the National Lottery Heritage Fund, Historic England, or other bodies—to support these ventures.
For example, the restoration of Birnbeck Pier has received backing from heritage organizations, while the Royal National Lifeboat Institution initially contributed £400,000 to acquire the pier before withdrawing. The Department for Transport funds the Portishead railway reopening; the Levelling Up Fund supports the Tropicana transformation; and Homes England finances much of the Banwell bypass, enabling thousands of new homes nearby.
Legal requirements mandate strict separation of capital and revenue budgets. Funds granted for specific infrastructure projects cannot be diverted to day-to-day spending. This creates an apparent contradiction: the council publicly struggles with daily finances while simultaneously progressing high-profile regeneration projects.
A council spokesperson explained, “When bidding for funding, we face stiff competition nationwide. Despite our relatively small size, North Somerset continually offers a compelling vision that highlights how investments can transform communities. This success has unlocked over £450 million in capital funding to improve transport, leisure, education, and more.”
These capital investments represent more than bricks and mortar—they are commitments to long-term community growth and opportunity, enhancing quality of life for residents, businesses, and visitors alike.
Moreover, the council often supplements external grants with its own capital funds. For instance, it recently allocated an additional £3 million toward the Portishead railway project to encourage greater government contribution and committed nearly £12 million toward the Banwell bypass when project costs increased.
However, capital projects are not entirely insulated from revenue pressures. Staff working on grant applications must be paid from the revenue budget, and borrowing to fund capital schemes can create ongoing revenue liabilities. Poor capital decisions can result in financial losses, as seen with the 2012 Carlton Street Car Park purchase, which now costs the council around £250,000 per year.
North Somerset currently manages about 170 capital schemes, from minor road improvements to major works like the Winterstoke Road Bridge replacement. The bridge project is funded by the Ministry of Defence, reflecting the historical significance and ownership tied to the area.
In summary, while day-to-day finances remain tight, strategic management, successful external funding bids, and prudent capital investment have enabled North Somerset Council to pursue transformative projects. These initiatives are designed to ensure the area’s infrastructure keeps pace with the evolving needs of residents, supporting a vibrant future for the district.