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At a meeting of the council’s Cabinet today, Leader Cllr Mike Bell set out the stark financial reality facing the authority, driven by historic decisions to keep council tax lower than in similar areas, year on year reductions in national funding and sharp increases in costs and demand for services.
“For years, North Somerset has had one of the lowest levels of council tax in the region,” said Cllr Bell. “That might have sounded attractive at the time, but it has meant less money coming in every year to fund local services. When you add in proposed changes to the funding formula and rapidly rising demand for adult social care, children’s services and homelessness support, the gap between what we can raise and what it costs to provide services has simply become too big to bridge with transformation, efficiencies, one‑off savings and the use of our limited reserves.”
The government’s recent Fair Funding Review assumes councils are already charging more council tax than North Somerset does, baking those historic differences into future funding. In its review, the government’s funding calculations are based on councils charging £2,060 council tax for a Band D property. This is £267 more per household than North Somerset Council currently charges.
At the same time, national funding has not kept pace with inflation or the cost of delivering services. Previously, the council had forecast that it would lose £17.4 million in funding from central government as a result of their review, but revised calculations indicate that North Somerset will be £23.8 million worse off over the next three years.
Cllr Bell added: “We want to be completely honest with residents. There is no painless option left. Higher council tax rises are now unavoidable if we are to keep essential services running and avoid a financial crisis that would do far more damage to our communities.”
The council is applying to government for Exceptional Financial Support (EFS) to manage the situation and protect services. This is a temporary financial flexibility used when councils face severe pressures. An application for EFS does not guarantee the council will get what it asks for – any requests will be assessed by the government.
EFS is not a grant or a bailout. It allows councils, with government approval, to:
- treat some day‑to‑day spending as capital so costs can be spread over future years rather than paid for all at once
- seek permission to increase council tax above the normal 4.99 per cent cap as part of a credible plan to balance the budget.
“EFS is a last‑resort safety net, and doesn’t mean more money from the government,” said Cllr Bell. “Any extra borrowing has to be repaid and we know that higher‑than‑usual council tax rises are a direct burden on residents. But the alternative would be emergency cuts to core services and the real risk of issuing a Section 114 ‘bankruptcy’ notice.”
The council is clear that the options now on the table are all difficult, but not acting would be worse.
Without council tax rises and EFS:
- services such as social care, support for vulnerable children and basic local infrastructure would face immediate cuts
- the council would be forced into emergency measures where only the legal minimum level of service is provided.
“Residents are being asked to help fix problems created by historic low tax decisions by previous administrations, proposed changes to the funding system and rising costs,” Cllr Bell added.
“We will continue to make more savings and transform services – council tax rises will come on top of that work, not instead of it. But it is not honest to pretend that efficiencies alone can close a structural gap of this scale.”
The council has pledged to use every pound from higher‑than‑usual council tax rises to protect essential services, especially for the most vulnerable, and to be open about how the extra funding is used.
“Our job is to protect people and keep North Somerset running,” Cllr Bell concluded.
“That now means taking difficult but responsible decisions. Council tax rises through Exceptional Financial Support, give us a chance to stabilise the finances, avoid crisis cuts, and start to rebuild a fairer, more sustainable footing for the future.”
The council continues to work with local MPs and other similarly affected councils to raise concerns with the government about the unfair funding position placed upon it.
The council’s budget will be set at a meeting in February and any proposed changes to council tax, including accepting exceptional financial support, will need to be agreed by the full council.