Somerset Council is grappling with a severe financial crisis, described starkly 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, highlighting the severity of its fiscal challenges.
Despite receiving support from the central government to help balance its budgets for 2024 and 2025, Somerset faces an alarming budget shortfall. This current year’s deficit is just over £45 million, projected to surge to more than £101 million by 2025/26, and expected to exceed £190 million by 2029/30.
In response, the council has invested £20 million from the sale of surplus assets into a transformation programme aimed at overhauling frontline service delivery. This includes hiring external consultants and allocating over £1.5 million towards AI technologies to boost productivity. However, even these measures may fall short of averting potential insolvency.
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Speaking at the council’s audit committee meeting in Taunton on September 29, Councillor Osborne, shadow portfolio holder for transformation, human resources, and localities, emphasized the urgent need for short-term measures. She stated, “While long-term planning is important, we must ensure short-term survival. We need to save around £45 million now for 2024/25 and face a £101 million gap in 2025/26. Failure to do so would seriously jeopardize the council’s future.”
Osborne also criticized ongoing procurement and contract commissioning issues, noting the alarming frequency of red alerts in the council’s financial reports—red denoting high risk or potential for serious reputational damage. “Something is seriously wrong,” she added.
The council’s traffic light system categorizes financial risks, with “red” signaling scenarios like effective bankruptcy or significant service disruptions. Osborne, representing Ilminster and nearby villages, cautioned that short-term transformation efforts may not be enough to pull the council out of its precarious position.
Interim Chief Financial Officer Clive Heaphy acknowledged that Somerset is among several local authorities needing repeated financial support from central government. He expressed his goal of not only legally balancing the 2024/25 budget but also achieving financial sustainability over the next four years. Heaphy announced plans to launch a public consultation on December 3, inviting residents to prioritize spending for the upcoming year.
“As a council, we must align our spending with our income,” he said. “Tough decisions are still ahead.”