Somerset Council taking action to address social care funding blackhole
By Issued on behalf of Somerset County Council
27th Oct 2023 | Local News
Selling properties, increasing Council Tax further, and reducing services are among options being considered as Somerset Council faces up to a £100m funding blackhole.
Latest budget figures which go before Somerset Council's Executive on 8 November are expected to show an estimated £70m increase in expected adult social care costs for 2024/25.
This means the Council cannot rely on reserves to cover the gap for next year and without action will need to issue a S114 notice, or effectively declare the council bankrupt, at the point of setting next year's budget in February.
Several councils nationally have been forced to do this in recent months, including Woking and Birmingham, with many others warning it could be a possibility without Government support.
Cllr Liz Leyshon, Somerset Council's Lead Member for Resources and Deputy Leader, said: "The funding model for local Government is clearly broken, with many councils struggling in light of soaring costs and demands on services.
"But while at Woking and Birmingham their finances were also impacted by a policy decision or legal action, here in Somerset we're simply running out of money due to the soaring costs of demand-led services, particularly the costs of residential and nursing care for adults.
"This is not because of poor control of service spend, it is simply an exceptionally large increase in our costs for demand-led services which we have no choice but to manage."
In August, Somerset Council warned that it would need to use reserves to balance the books for this year. Latest figures show the budget gap for the current financial year now stands at £27.3m. Although this figure could be covered by reserves, the projected shortfall for the following year is now £100m, far exceeding levels of reserves.
The main driver of this is an £70m increase in adult social care costs, caused by proposed changes to national policy which aimed to make the cost of care fairer. Although the policy change was later abandoned by Government, in Somerset this has led to significant rises in the costs of residential and nursing care placements. For example, residential care placement costs have risen from around £577 per week in 2022/23 to £900 per week next year.
Officers are now drawing up savings proposals which will be voted on by Executive at its December meeting. These could include selling assets and buildings, including offices; increasing Council Tax, fees and charges as much as possible; reducing staffing levels; and reducing council services to statutory levels.
Cllr Leyshon added: "Our priority will be to maximise all opportunities, work with partners and do everything we can to ensure we can continue to take care of those most in need.
"No-one wants to be in this position but we are well aware of the implications of a Section 114 notice. It is our intention to take the difficult decisions now and to set a direction for the new Council with the benefit of our local knowledge and commitment to Somerset.
"The alternative is to leave it to Government Commissioners, paid by the people of Somerset, to find a financial answer that does not take into account local factors or experience."
The full papers will be published next week, in advance of the Executive meeting on 8 November.
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