Should have seen it coming
As the financial crisis at Somerset County Council continues, following the announcement of a further £13m of cuts earlier this week, you will probably be wondering why this has come out of the blue. After all councils always claim they don’t get enough. There is a struggle and an argument every year.
Surely it cannot have become so bad so quickly.
The simple answer is no, it has been this bad for a long time, but no-one has been looking closely enough.
The issue is essentially that people, including journalists have simply not read the accounts in detail. Breaking even is all very well, unless it is simply because you have revalued your property portfolio or your pension liability. Those are not “real” sums, they are things that might or might not happen in the future. You can revalue up or down, but it is only “real” when you sell a property or have to pay a pension.
The figure that is seldom focused on, is the one figure that is of paramount importance. That is the surplus or deficit on the provision of services.
In other words how much money cam in via taxes and grants, and how much went out on services.
If you look at this figure you will see that SCC have been playing with fire for a long time. The bottom line is this should not have been a surprise. Every year in the past 5 SCC have had a very significant loss on the provision of services. Compare this with two neighbouring councils, Bath and North East Somerset (BANES) and Wiltshire. Both are Conservative run like Somerset. Wilstshire is predominantly rural, very similar to Somerset, BANES predominantly urban. Although BANES serves a smaller population, that simply means it gets less in taxes and grants to spend.
All three face similar challenges in terms of balancing cash coming in with cash going out.
Yet there is a clear loser from this picture. Somerset has had an accumulated deficit on the provision of services double that of Wiltshire and nearly 3 times the level of BANES.
The September Leveller will explain exactly how the crisis came about within Somerset, but this comparison shows up the performance of SCC over the last 5 years for what it is.