Council asks to hike tax bills to fill £54m gap

People in Somerset could face a bigger increase to their council tax bills next year if the local authority is granted special permission.

Somerset Council has written to the government to ask permission to raise its share of council tax by more than the usual 5% threshold as it sought to plug a £54m gap in its budget for next financial year.

The Liberal Democrat executive committee voted on Monday for the council's leader to write to the minister for local government, following a policy announcement on local government finance settlements last week.

The council already has an agreement in place for exceptional financial support from the government for the current 2024/25 financial year.

Somerset Council declared a 'financial emergency' in November 2023 and had to find £100m of savings and cuts to balance its budget for 2024/25.

That included permission from the government to use £76m of money raised by selling council buildings and investment properties on running day-to-day services and paying redundancy packages for hundreds of staff.

A total of 450 jobs were currently at risk of compulsory redundancy across the authority, with a consultation taking place until later this month.

Some 195 workers took voluntary redundancy earlier this year.

Now it says it is facing similar challenges for 2025/25 with a budget gap of £88m with £54m remaining after a first set of savings have been identified.

Those initial savings include £34m from salaries, through the current round of redundancies, and nearly £4m from changes to the council tax support scheme, which gives discounts to low incomes households.

It has also identified nearly £4m of savings from an adult social services scheme called ‘My life, my future’ which the council says was "allowing people to maintain or increase their level of independence".

The council hopes to plug some of the remaining £54m by increasing its share of people's council tax bills by above 5%, which would normally require a referendum of local residents.

The executive committee meeting heard that councillors believed the authority could qualify for a higher increase in council tax due to the exceptional financial support it is already receiving from the government.

It passed a motion to explore the case for Somerset Council's council tax to be raised by more than the referendum limit due to its "exceptional" financial situation.

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