West Somerset not viable as council, says LGA

16 Nov 12
The Local Government Association has warned that West Somerset District Council faces unprecedented financial difficulties and is not viable in the longer term.
By Richard Johnstone | 16 November 2012

The Local Government Association has warned that West Somerset District Council faces unprecedented financial difficulties and is not viable in the longer term.

West Somerset had asked the LGA to examine its finances after coming under significant pressure following government funding cuts. The umbrella body’s review concluded that the council was ‘not viable as a unit of local democracy and governance over the longer term’.

The LGA’s examination, published yesterday, said the council faced unavoidable increases in inflation, pay, contract and property costs of £150,000 each year, representing around 3% of council spending. However, it was able to raise just £39,000 annually through a 2% council tax increase – the limit before the authority would be obliged to hold a local referendum.

This structural problem generates an ongoing potential increase in the council’s budget deficit of £111,000 each year on an annual net budget of £4.939m, an unprecedented challenge, the LGA concluded. This means the authority’s annual overall funding shortfall would increase to almost £500,000 in 2015/16, and be more than £1.5m in 2019/20.

This is an escalation of what the report called the ‘significant financial pressures’ the council has faced historically, which the LGA and others have worked with the authority to address over a number of years.

There is no established measure or definition of the viability of a council and no process nationally prescribed to deal with such a situation, the report noted.

However, the local authority would need a 39% increase in council tax to achieve a balanced budget for the three years ending in March 2016.

While the council could make a ‘full range of savings’ over two years to continue as a viable organisation, the government needed to respond to the ‘extent of the budget deficit’, the report added.

‘We suggest that the council over the longer term would be unable to provide essential or statutory services to a minimum acceptable level,’ the report stated. It will struggle toensure an ongoing acceptable level of risk to life, health, wellbeing, property and/or assets’ in the future and would be unable to maintain residents’ confidence.

As a consequence, the report recommended that the authority, which has a population of 35,075, should consider its long-term viability. ‘Serious consideration’ should be given to accelerating discussions with the Boundary Commission to instigate a review of its area.

The surrounding councils of Taunton Deane and Sedgemoor, as well as Somerset County Council, should work on plans to share services with West Somerset where cost savings could be made in the medium term.

Responding to the report, West Somerset council leader Tim Taylor admitted ‘there is a question’ over the council’s future.

‘The report recommends that WSC considers achieving savings both internally within the council and externally through the sharing of services with neighbouring councils and this will be explored further,’ he said.

‘We will take the LGA recommendations very seriously indeed. Much will still depend on the level of government funding over the following years. We will continue to make the case for WSC to receive an annual income per head of its population which at least matches that of other Somerset district councils, so that we are able to provide services at a similar level to those provided by other Somerset district councils.’ 

He added that the most challenging part of the report is the questioning of its long-term viability as a unit of local democracy. The council will consider ‘all our options’ at a full council meeting on December 12 in response to this, Taylor said.


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