The Council is determined to protect frontline services for the community as much as possible despite seeing its funding cut for the sixth year in succession but is preparing for difficult decisions and an uncertain financial future.
Leader of the Council, Cllr Anthony Trollope-Bellew, said: “It will be significant achievement to set a balanced budget in 2016-17 but the financial challenge remains serious. We have faced financial problems in the past and have found solutions thanks to some brave and ground-breaking decisions, such as our partnership with Taunton Deane.
“The challenge we face now is not of our own making but due to circumstances beyond our control. We must be honest and open about the scale of the issues we face.”
West Somerset is facing a substantial cut in its Revenue Support Grant from the government, down from £840,000 in 2015-16 to £550,000 in 2016-17. This grant is further expected to reduce to nil by 2020. The impact of the reduction has been compounded by a business rates appeal for Hinkley Point B (HPB) nuclear power station.
The appeal was lodged in 2012 and West Somerset Council prudently set aside funds to cover the cost of a successful appeal. The outcome was more serious than forecast – it was exceptional, resulting in a refund of £7.2 million.
A Government “safety net” system, lessening the impact, kicked in but the council still had to refund some £1.6 million from its own reserves and make provision for an annual loss of business rates income amounting to some £300,000.
This has meant the council’s reserves are now close to the legal minimum and the budget gap doubled from £300,000 per annum to £600,000 per annum. While a balanced budget can be achieved for the coming year, there are concerns for the future viability of West Somerset.
As a result of making savings, rescheduling its capital debt, an increase in New Homes Bonus Grant and continued savings resulting from the partnership with neighbouring Taunton Deane Borough Council, West Somerset is able to bridge the budget gap for the year ahead.
West Somerset’s share of Council Tax, however, could rise from £140 a year to £147 for the average Band D property which would include a £5 Council Tax increase plus a 1.25% levy for the newly created Somerset Rivers Authority. The Council Tax increase is supported by West Somerset’s Scrutiny Committee.
The proposals are to be considered by the Council’s Cabinet on February 3 before going to Full Council for the final decisions later in February.
The report to Cabinet warns that while the budget gap can be bridged in the coming year, the future remains extremely challenging. Further savings could be achieved through a redesign of services delivered in partnership with Taunton Deane. But there’s no guarantee this could assure the Council’s financial future.
The report says: “Whilst the budget for 2016/17 is balanced with clear savings plans in place, the medium term financial plan shows that we have a gap of £0.218m for 2017/18, which rises to over £1m by 2019/20. On a base budget of only £5m, with very little discretionary spend, it is questionable whether achieving this level of saving is actually possible.
“Whatever the future holds – the scale of change ahead is significant.”
West Somerset’s share of the total Council tax bill is about 9% with the balance for services provided by Somerset County Council, Police and Fire authorities, and Parish and Town councils.
Debbie Rundle, on behalf of West Somerset Council,01984 635280 or 01823 356407 email email@example.com