Council 'breathing easier' after budget underspend

A council is “breathing slightly easier” after balancing its books for the last financial year but is yet to be in the clear.

Somerset Council declared a financial emergency in November 2023, and only managed to pass a balanced budget in February by committing to the maximum possible rise in council tax, selling around £20m of non-operational assets and making savings of around £35m.

Since the budget was approved, the council has been working hard to stave off the threat of effective bankruptcy, including a transformation programme which is leading to redundancies.

It is forecasting a smaller underspend for the current year, but deputy leader Liz Leyshon said uncertainty remained going forward.

The council’s financial position was discussed at length when its executive committee met in Taunton on 2 September.

In the 2023/24 financial year, the council achieved an underspend of around £1.8m, or around 0.3 per cent of its total annual revenue budget, the Local Democarcy Reporting Service was told.

This sum has been added to its general reserves, meaning it can be used in the coming months and years should costs in other areas rise.

Councillor Leyshon said: “This has made breathing slightly easier for a while this summer – but not for long.”

In the current 2024/25 financial year, the council is forecasting an underspend of £200,000, based on the spending figures for the first three months.

Spending on some areas of the council, such as adult services, has been brought under greater control, but spending on other areas is still higher than forecast – particularly in children’s services and waste services.

Within the capital budget that includes new roads, schools and major regeneration projects, around £74m of spending is subject to “slippage” – meaning it will be spent in the next financial year or later.

This slippage affects elements of the town deals in both Bridgwater and Glastonbury, the improvements to Bridgwater’s “northern corridor” and the upgrades to the Chelston link road in Wellington.

Mandy Chilcott, the Conservative shadow portfolio holder for resources and performance, said: “This says to me that we have not delivered on the projects which we were hoping to deliver on.

“There have been delays for the people of Somerset, and there is a cost of borrowing.

“That money could have been spent on other projects in the county, and we know how tight our budgets are.

“This doesn’t show any signs of improvement for me – this has been an ongoing issue for the council.”

Council leader Bill Revans has reiterated his call on the new Labour government to address how local government is funded, arguing the ongoing financial issues would persist without much-needed reforms to council tax and business rates.

“There has been hard work that has gone on to get us to this position,” he said.

“It doesn’t take away from still being in financial difficulty like many other councils are in the country.”

Follow BBC Somerset on Facebook and X. Send your story ideas to us on email or via WhatsApp on 0800 313 4630.