Somerset Council is set to approve a balanced budget for the 2026/27 financial year, despite continuing concerns over its financial reliance on exceptional government support. The council’s executive committee convened in Taunton to provisionally approve the budget, which will be presented to the full council for final approval on March 4.
The proposed budget includes a 4.99 percent increase in council tax and relies on a third consecutive year of special financial assistance from the Ministry of Housing, Communities and Local Government (MHCLG). However, Interim Chief Financial Officer Clive Heaphy issued a stark warning that this financial support will not continue beyond this year. Without a fourth year of aid, the council must urgently control spending to avoid financial distress before local elections in 2027.
In his Section 25 report, Mr. Heaphy highlighted Somerset’s unique challenges, citing its rural character, with almost half of its population living in rural settlements, and an aging demographic. These factors contribute to the council’s financial pressures, which have seen only modest relief from the government’s fair funding review.
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Recent developments have provided some respite. The Department for Education agreed to write off up to 90% of Somerset’s dedicated schools grant deficit, contingent on the council implementing measures to manage rising demand for special educational needs and disabilities (SEND) funding. Nevertheless, Mr. Heaphy cautioned that this relief should not be viewed as unrestricted funds.
The council will receive £30 million in exceptional financial support for 2026/27, primarily reallocated from the previous year, with £25 million addressing the budget gap and £5 million funding the council’s transformation programme aimed at reducing future costs. Mr. Heaphy emphasized that much of this programme is now financed through the flexible use of capital receipts, improving the council’s financial optics.
Despite this, government officials remain concerned. Local government minister Alison McGovern MP expressed significant reservations regarding the pace of Somerset’s transformation efforts. An external assurance review is planned to scrutinize the council’s risk management and recovery plans, with potential for further government intervention if adequate progress is not demonstrated.
Mr. Heaphy stressed the critical need for the council to take ownership of its finances, noting, “We won’t be getting a fourth year of exceptional financial support. We have to get control of our own lives, either by cutting services or through transformation.” He remains cautiously optimistic, stating that Somerset can emerge from its financial challenges while maintaining excellent services.
Councillor Sarah Wakefield, portfolio holder for adult services, housing, and homelessness, acknowledged both risks and opportunities within the budget. She highlighted the sale of council properties and strategic partnerships as ways to ease financial challenges. Deputy leader Liz Leyshon added that Somerset’s council tax rates are expected to stay below the national average and regional neighbors, with no above-referendum increase planned for 2026/27.
However, the council continues to face external obstacles, such as the phosphate crisis delaying around 12,000 homes due to environmental mitigation requirements. Councillor Richard Wilkins, responsible for transport and waste, underscored the additional costs of maintaining infrastructure in rural areas and criticized the government’s inadequate support during recent extreme weather events.
The full council will finalize the annual budget at a meeting on March 4 at the Canalside conference centre in Bridgwater.