Somerset Council sold over £90 million worth of assets last financial year and plans to generate an additional £35 million through further sales by March 2026. The council has been grappling with a financial emergency since November 2023, driven by rising demand for children’s services and adult social care.
To address budget shortfalls, Somerset Council has implemented measures including council tax increases, significant staff reductions, and an ongoing structural transformation. A key strategy has been offloading commercial investments and non-operational properties, using the proceeds to sustain vital frontline services.
Most of the council’s commercial investments were inherited from the abolished district councils in April 2023. These assets, acquired with government loans over recent years, were intended to provide steady rental income to compensate for cuts in government grants since 2010. However, the annual income from these investments has recently declined by 10%, now standing just under £10 million, partly due to recent sales of properties such as Trafalgar House in Taunton and a factory in West Yorkshire.
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The council currently faces a 13% vacancy rate in its commercial portfolio, following partial tenant departures in properties like King William House in Bristol. Robert Orrett, head of the council’s commercial investment service, explained that while fully let properties are prioritized for sale, the council is increasingly left managing assets that pose operational challenges. Many investments were secured with short-term leases aimed at higher yields, but the situation is evolving.
In the current 2025/26 financial year, Somerset Council has completed sales totaling almost £7.8 million and is actively marketing properties valued over £10.6 million. When questioned about tenant payment patterns, Orrett noted that while most tenants pay quarterly, some smaller tenants switch to monthly payments during tough times. The council seeks to support these tenants, aiming to avoid forcing any out of business.
Councillor Sarah Wakefield, portfolio holder for adult services, housing, and homelessness, emphasized the importance of understanding tenant circumstances during this challenging period.