LevellerLive

Today we received the following open letter from Somerset Council Leader Bill Revans. We reproduce it for you without comment:

Dear Somerset Resident
You may have seen in the news that Somerset Council has declared a Financial Emergency. As
Leader of Council, I am writing to give you more information and to ask you to help us present
Somerset’s case to Government by writing to your Member of Parliament.
Somerset Council has a projected overspend of more than £27million in the current year, and a
budget gap of £100million for next year. These are largely due to increasing costs of the social care
services we must provide for our most vulnerable adults and children. Income from Council Tax is
limited and the difference between income and expenditure is growing each year.
If we are unable to propose a balanced budget for the next year, we would have to declare a Section
114 notice. That is effectively bankruptcy for a Council. This would mean that unelected, highly paid
commissioners would come in to stabilise the council’s finances, selling off whatever they could,
cutting all services except for those we legally have to provide, and raising your council tax. And
Somerset Council tax payers would have no choice but to pay them. We are determined that these
decisions should instead be made by locally elected Councillors who know and love Somerset.
That is why we will make the tough decisions needed to stabilise the finances of the new unitary
Somerset Council, in order to avoid a Section 114 notice.
As Liberal Democrats we believe in transparency, openness and honesty. We are aware of many
other councils across the country and across the political spectrum in similar positions. This year 1 in
10 councils like Somerset are in a similar financial position to us. Six out of ten are forecasting that
they will be in this position by 2025.
We have taken the decision to go public on our position here in Somerset so that you know the
situation. We are working with the officers at Somerset Council to move further and faster in our
actions to address the budget gap.
Liberal Democrats opposed the Government’s decision to impose one unitary council on Somerset.
We have inherited that business case, and are making good progress on the savings identified.
However, those savings will be nowhere near sufficient to deal with the forecast £100 million deficit,
so we will need to find considerable savings this year, and in the years to come.
So how did we get here?
Local Government all over the country has faced the following challenges over the past few years
and all have impacted our financial position in Somerset:

• The Covid-19 pandemic, the vaccination programme, and the end of Government’s Covid
  grants masked issues with care providers’ costs and our fee structure for adult social care
  placements
• Nationwide recruitment issues that were made worse by Brexit, particularly in the care
  sector
• The commencement and postponement of the “Fair Cost of Care” exercise, which opened
  the book on fees charged for care and nursing homes across the whole country, exposing the
  previous low fee structure in Somerset
• The invasion of Ukraine, causing so many people to leave their homes for other countries,
  and huge impact on energy costs
• Inflation moving to double figures
• The short and disastrous period of the September 2022 Truss budget which led to soaring
  interest rates after historic low rates from 2010 to 2022
• Increased costs of placements and transport in children’s services and education
• Increases in homelessness and consequent costs to the council caused by increasing rents
  and mortgages.
  These have all changed the financial landscape of this country, especially Somerset.
  This position in Somerset is especially difficult because we have both a low rate of Council Tax and a
  low Council Tax base compared with other similar Councils across rural areas of the country.
  The previous Conservative administration of Somerset County Council took the ideological position
  to freeze council tax for six years between 2010 and 2016. This has stripped more than £200 million
  pounds from the council budget since, and continues to have an effect every year. This is a hugely
  detrimental factor in Somerset’s situation.
  These challenges make this an especially tough time to create a viable new Somerset Council.
  However, we are confident that we have the team and the plan to respond to this emergency. Please
  be assured that we are:
• Managing our finances prudently and responsibly.
• Streamlining public services in Somerset by implementing the one Unitary Council for
  Somerset and delivering significant savings and efficiency measures in line with the
  Government approved business case for Somerset Council.
• Developing partnerships to reduce spending, working closely with Somerset NHS to
  collaborate on making the health and social care systems work together better.
• Working with our City, Town and Parish Councils to devolve services and assets.
• Working with our voluntary sector to improve the prevention agenda and community
  response, so that people lead fulfilling and healthier lives in their own homes for longer.
• Selling assets and reviewing all areas of spending.
  However, all this will not be enough to close the gap between our income and our spending on
  demand-led services.
  Our overspend position is not because of poor control or oversight, nor policy decisions or legal
  action – it is simply an exceptionally large increase in our costs for demand-led services, set against
  our constrained ability to raise additional income. The national model for funding social care is
  broken and we urgently need your support to ensure we can continue to care for those most in
  need.
  This is not a new debate.
  Somerset County Council – under the previous administration – sounded the alarm back in 2018. We
  were not the first to do this but, thanks to Somerset’s bold work with the BBC Panorama team, we
  sounded it the loudest on behalf of all local authorities and everyone receiving social care.

The Government has failed to heed these warnings from many different sources about the
fundamentally broken system of funding that cannot keep pace with the spiralling costs of care.
Thousands of people signed a petition calling for all political parties to work together to find a
solution.
The time for talking has passed and we now need an urgent solution.
To illustrate the reality of our situation, in 2022 a typical placement in a care home was costing
Somerset council £575 a week. The same placement now costs us £900. If you multiply that by 52
weeks and by the increasing numbers of our most vulnerable residents that need our care, the scale
of the problem is clear. At the same time we can only increase Council Tax by single figure
percentages. Please know that we understand that ANY increase maybe too much for those on
limited budgets and that is why we introduced a new Council Tax Reduction Scheme, and an
Exceptional Hardship Scheme.
Government funding for Councils has reduced so much over the 14 years of austerity, and costs
have increased so much that we now find ourselves with a structural deficit and a financial
emergency.
I have written to Michael Gove, the Conservative Secretary of State for the Department of Levelling
Up, Housing and Communities, to ask him to:

• Take urgent and meaningful steps to ensure that the issue of adult social care funding is
  addressed as part of the forthcoming Autumn Statement and Local Government Finance
  Settlement;
• Provide us with the freedom and flexibility for us to do all we can to address this matter
  locally; and
• Set out a clear plan which will deliver a better and more sustainable solution for the future
  of local government finance.
  I have copied the letter to our five Somerset Members of Parliament and I would ask for their
  support for Somerset Council, our residents and the services we provide as a Council.
  Please can you support us by writing to your Member of Parliament asking them to support your
  Somerset Council as we plan to survive this financial emergency? Your voice is essential in ensuring
  the Government understands the scale of this challenge and the potential impact of Somerset’s
  financial emergency.
  Thank you, and take care.

Councillor Bill Revans, Leader of Somerset Council