Somerset Council is confronting a severe financial crisis, with an estimated £73 million budget shortfall raising fears of a “lingering death,” according to councillors and auditors. The authority recently launched a consultation on its initial budget proposals, which include just over £20 million in new savings or increased fees.
Interim Chief Financial Officer Clive Heaphy acknowledged that the council will require exceptional financial support from the government for a third consecutive year to avoid depleting its reserves completely. However, members of the audit committee warn that the council may have delayed necessary reforms too long, making effective bankruptcy increasingly likely.
External auditors Grant Thornton issued three statutory “red cards” highlighting urgent concerns, noting that Somerset must accelerate significant service delivery changes. Taunton resident and council critic David Orr pointed out that the council’s transformation plans have not advanced sufficiently to cover forecasted budget gaps in 2024/25 and 2025/26. He stressed the council’s heavy reliance on exceptional support through asset sales, with nearly £44 million raised this year alone, alongside flexibility over a 2.5% council tax increase.
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Despite saving around £34 million and reducing approximately 300 staff during the first phase of its transformation programme, the council continues to face critical financial instability. The next phase, named ‘Inspiring Innovation,’ is underway with Newton Consulting Ltd., at an initial cost of £1.5 million, projected to rise to £20 million over coming years.
Grant Thornton’s representative Barrie Clarke underlined ongoing vulnerabilities including the council’s dependency on short-term government support, pressures on children’s services, and a significant deficit in the dedicated schools grant, which remains outside the council’s balance sheet until 2028.
The council’s projected overspend for 2024/25 has been reduced to under £1 million, a sign of progress. Yet, Councillor Gwilym Wren warned of a lack of urgency, describing the situation as akin to “staring down the barrel” of bankruptcy. He highlighted that pressures on essential services persist and the budget gap shows no clear path to closure without further emergency funding.
Chief Executive Duncan Sharkey acknowledged regional challenges but noted “capacity is an issue” when implementing changes without disrupting frontline services. He expressed cautious optimism about setting a balanced budget for 2026/27, albeit with some ongoing exceptional financial support.
Exceptional financial support allows the council to use proceeds from asset sales for day-to-day expenditures, a rare and unsustainable practice. Councillor Norman Cavill urged clear communication with the public about such sales, emphasizing the necessity of honesty regarding the council’s financial survival strategies.
Residents are invited to comment on the council’s budget proposals through mid-January, with decisions expected by late February 2026. Council leader Bill Revans reiterated the council’s commitment to tough decisions, innovation, and partnerships to secure financial stability, underscoring the importance of public engagement during this critical period.