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At a meeting of our Cabinet on Wednesday (10 December), Council Leader Cllr Mike Bell outlined the stark reality that years of keeping council tax lower than neighbouring areas, combined with reduced national funding and rising demand for essential services, have created a financial gap that can no longer be bridged through efficiency savings alone.
For years we have had one of the lowest levels of council tax in the region which has meant less money coming in every year to fund local services. When you add in proposed changes to the Government 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.
Even with transformation of services, efficiencies, one-off savings and the use of our limited reserves we can’t make ends meet.
Funding formula changes hit hard
The government’s ongoing Fair Funding Review assumes councils are already charging much higher levels of council tax than we are—a difference that is now built into future funding calculations. While the review is based on councils charging £2,060 for a Band D property, North Somerset currently charges £267 less.
At the same time, national funding has failed to keep pace with inflation and the fast-rising costs of providing services. Earlier estimates suggested we would lose £17.4 million over three years as a result of the government review; revised calculations now place the figure at £23.8 million.
Applying for council tax flexibility
In response, we are applying to government for one-year council tax flexibility - a temporary measure used when councils face severe financial pressure.
If granted, this would allow the council to raise council tax above the normal 4.99 per cent cap as part of a credible plan to balance the budget.
This is a last resort as 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.
Without higher-than-usual council tax rises:
- critical services such as adult and children’s social care would face immediate cuts
- support for vulnerable residents could be reduced to the legal minimum
- the level of local infrastructure maintenance would fall sharply
- the council would be forced into crisis measures that would impact every community.
We are committed to using every additional pound we receive to protect the most essential services and we promise full openness about how any additional funding is used, with a focus on safeguarding services for the most vulnerable.
We continue to work closely with local MPs and other councils in a similar position to raise concerns about the long-term fairness of the funding system.
The final budget—and any proposed changes to council tax—will be decided at a Full Council meeting in February.
To find out more about the budget challenge visit our website.