Somerset Council’s Leader Bill Revans has cautiously welcomed the three-year Local Government Finance Settlement for 2025/6 but has urged the Government to do more to increase councils’ spending power without putting the burden on taxpayers.
As part of last week’s announcement on the provisional settlement, Somerset Council understands the council will receive an increase in its Core Spending Power – this is revenue funding available for council services through the Local Government Finance Settlement – of around 13% over the next three years.
While this is positive news, there is an assumption that around 97% of that increase is funded by local people through Council Tax and this will require greater tax increases to support this. It also appears Somerset will lose out significantly on income received from business rate collection.
Overall, when all aspects of the settlement are considered, the Council forecasts that it will be marginally better off next year, but further work needs to be undertaken to fully model the highly complex settlement.
The longer-term view created through a three-year settlement has been welcomed as it will allow the Council to better plan its budget, but the Council is still facing significant funding gaps in future years, reflecting ongoing pressures in areas like children’s services, placement costs and homelessness.
Somerset Council continues to plan in a financially prudent way and will take a range of steps to deliver a balanced budget for 2026/27.
This will include a request to Government for further Exceptional Financial Support (EFS).
Cllr Revans said:
“We have worked hard and had to make tough decisions to deliver savings, guided by feedback from residents, businesses and partners, while protecting vital services.
“While the three-year settlement which has been announced contains some welcome news and allows us to plan with more certainty for 2026-29, we maintain our view that the current funding model is broken. Relying on increased Council Tax to fund essential, demand-led services such as adult and children’s care is not sustainable.
“Our work to deliver savings, innovation and the vital services we know our communities value must be underpinned by a fairer, long-term funding system that recognises the pressures councils face and the work our teams deliver every day.”
The Council is inviting the public to have their say on finances and council services. The consultation is open to everyone and the results will help influence Councillors as they look to set a balanced budget in February 2026.
Somerset Council’s Budget Consultation survey, due to close on 14 January, can be completed online. Paper copies are available in Somerset libraries.