Somerset Council is grappling with a critical financial crisis, described by Conservative Councillor Sue Osborne as having “more red lights flashing than a red light district.” The council declared a financial emergency in November 2023 and has since relied heavily on central government support to balance its budgets for 2024 and 2025.
Despite this assistance, Somerset faces a daunting budget shortfall exceeding £45 million for the current financial year. Projections for next year show the deficit ballooning to over £101 million, with a staggering increase expected to surpass £190 million by 2029/30.
In an effort to close this enormous gap, the council has reinvested £20 million—raised from selling surplus assets—into a transformation programme aimed at overhauling front-line services. This includes contracting external consultants and investing more than £1.5 million in artificial intelligence to boost productivity.
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However, Councillor Osborne, the shadow portfolio holder for transformation, human resources, and localities, expressed grave concerns about the council’s immediate prospects. Speaking at the audit committee meeting in Taunton on September 29, she emphasized the urgency of short-term financial survival, noting that savings of around £45 million must be achieved urgently for 2024/25, with an even larger £101 million target looming for 2026/27.
She highlighted ongoing issues with procurement and contract commissioning that exacerbate the council’s financial strain. “When you see our financial reports, there are more red lights flashing than you’d ever find in a red light district. Something is seriously wrong,” Osborne remarked.
The council uses a traffic light system to evaluate financial risks, with red representing highly likely scenarios—or those with severe impacts—that threaten service delivery and the council’s reputation. Osborne warned that while long-term transformation plans are important, they may not be enough to prevent a potential financial collapse.
Interim Chief Financial Officer Clive Heaphy acknowledged Somerset’s challenges but pointed out that it is not alone; several local authorities have sought exceptional financial support from central government across consecutive budgets. Heaphy outlined his goal to balance the budget not just for the upcoming year but over a four-year horizon to demonstrate financial sustainability to the government and external auditors.
He also announced that public consultation on the 2025 budget would begin on December 3, inviting residents to help prioritize council spending. “As a council, we need to align our spending with income, and tough decisions lie ahead,” Heaphy concluded.