Somerset Council won't find out whether it can set a balanced budget for next year until five days before the full council meets in Bridgwater.

The council is facing a budget gap of £52.2m for the 2025/26 financial year, driven predominantly by rising demand for children's services and adult social care, and the increasing costs associated with delivering these services.

This gap is in spite of the council finding savings of £48m for the coming year – including £34m from drastically reducing the number of staff and managers being employed from April.

The council was given permission by central government in early-February to raise council tax by 7.5 per cent this year – higher than the normal cap of 4.99 per cent – in reflection of Somerset's relatively low council tax base.

But this additional council tax will only raise around £9.1m – leaving the council reliant on "exceptional financial support" from the government to plug the remaining budget gap of around £43m.

If the government does not allow this on February 28 – five days before its budget setting full council meeting on March 5 – the authority will have no choice but to declare effective bankruptcy and call in central government commissioners.

Maria G. Christofi, the council's interim chief finance officer, made this admission in the official budget proposals, which will be discussed by the council's corporate and resources scrutiny committee in Taunton on Monday (February 24).

She said in her written report: "Somerset Council is permitted to increase

the Council Tax by a further 2.5 per cent [above the referendum limit of 4.99 per cent], therefore by a total of 7.49 per cent for 2025/26.

"This raises an additional £9.18m of income, thereby leaving a remaining budget gap of £43m.

"Council tax alone is not sufficient to close the budget gap, and therefore the council is dependent upon the 'in principle' approval and receipt of exceptional financial support by the Ministry of Housing, Communities and Local

Government (MHCLG) of £43m.

"This will be in the form of a capitalisation direction in order to set a balanced and legal budget for 2025/26.

"The decision from MHCLG regarding this support is expected to be made for all local authorities at the same time by February 28, although this is not guaranteed."

A capitalisation direction allows councils to either borrow money or to use the proceeds of selling off land, assets and property (i.e. capital receipts) to fund day-to-day services (i.e. revenue spending).

When the council set its 2024/25 budget, it was largely able to do because of a similar capitalisation direction from the government for nearly £76.9m – of which £40m was set aside to cover redundancy costs associated with the transformation programme, which will come to fruition in April.

The council has already been selling off vast swathes of these assets since declaring a financial emergency in November 2023, ditching the commercial investments it inherited from the former district councils and paring back its non-operational assets (though some, like the High Street car park in Taunton town centre, have been given a reprieve following public backlash).

If the MHCLG (headed up by deputy prime minister Angela Rayner MP) does not, for whatever reason, allow the capitalisation direction, the council will have no choice but to declare effective bankruptcy and issue a Section 114 notice.

This will halt all non-essential spending and result in government commissioners being called in – which could lead to further job losses, exceptionally high council tax rises, and grant funding secured for major projects (such as the numerous regeneration schemes across Somerset) being withdrawn.

Council leader Bill Revans said: "The government has promised to reform the broken system of funding for local councils like Somerset, who are struggling with rising demand and costs for core services like social care.

"Unfortunately, this will take time that we simply do not have.

"In the short term, we've had no choice but to ask the government for support, and that very sadly means we will have to take a difficult vote on putting up council tax bills by the maximum amount allowed.

"We know this is unwelcome, but council tax rates in Somerset will remain below the national average, and below many of our neighbours.

"We will continue to do everything we can to move towards financial sustainability, including exploring all areas to further reduce costs and find savings.

"We will also continue to lobby government for a fairer system to provide essential services looking after the most vulnerable adults and children in our communities."

Following the scrutiny meeting on Monday (February 24), the budget proposals will come before the council's executive committee on March 3 and be voted on by the full council on March 5.

If the budget is approved, an average (Band D) property will be paying an extra £129 a year, or £2.49 a week – still lower than the national average.