Somerset Households Face Huge Council Tax Rise to Avoid Bankruptcy
Somerset households may see a 7.5% council tax increase to prevent financial collapse
Somerset, Council Tax, Angela Rayner, Financial Support, Budget Gap
Somerset: Households are facing a big council tax hike this year. The Deputy Prime Minister, Angela Rayner, mentioned tough choices ahead. Somerset Council might raise council tax by 7.5%. This includes a 2.5% increase above the national cap of 5%.
The council sought Exceptional Financial Support from the government for its budget. The Ministry of Housing confirmed that Somerset can raise council tax beyond the usual limits. The council will soon decide on this increase.
However, even with this rise, it won’t cover the budget gap. The Deputy Prime Minister noted ongoing challenges in fixing the local government system. She emphasized balancing council needs with taxpayer interests.
Somerset Council’s leader, Cllr Bill Revans, said they need to consider the implications of this announcement. The council has been taking emergency actions to cut costs since its creation in April 2023.
They plan to save £47 million next year, mainly by reducing staff. But costs in social care are rising, leaving a £66 million budget gap for 2025/26. Revans wrote to the government for help, which led to the council tax increase approval.
The council will meet to decide on the increase. If it doesn’t raise enough money, they may need to sell assets or borrow funds. Upcoming meetings will discuss the budget, including an extraordinary meeting on February 17.
In November 2023, the council declared a financial emergency. They managed to set a balanced budget in February 2024 by making significant cuts. Staff redundancies will account for a large part of the planned savings.
Somerset has a low council tax base, meaning it can raise less money compared to wealthier areas. It’s one of six councils allowed to increase council tax beyond the 5% limit.
Other councils, like Bradford and Birmingham, also received permission for increases. The government stated these decisions were tough but necessary to prevent further financial distress.
Despite these increases, the overall national council tax rise is expected to stay below last year’s 5.1%. The government is providing over £69 billion in funding this year, a 6.8% increase from last year.
They also announced a £600 million Recovery Grant for councils. This includes funds for social care and support for managing national insurance increases. The Deputy Prime Minister stressed the importance of councils in delivering vital services.
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