North Somerset Council faces £12.1m budget gap amidst increased demand for social care
Despite a significant rise in council tax, the council struggles with a major budget deficit
Last updated 23rd Sep 2026
Auditors are warning that North Somerset Council must deliver more savings to reduce the risk of needing another exceptional council tax rise.
The council was given government permission to go above the usual cap of 4.99% for a one off council tax rise of 8.99% last April. But despite the tax hike and £20m of cuts, the council is again facing a major budget black hole.
Work is now underway to close a forecast budget gap of £12.1m in the next financial year, part of a £40.6m budget gap across the next four years. But auditors say the council has “much work to do” to ensure it does not need to rely on another exceptional council tax rise.
In their draft annual report, which goes before the council’s audit committee on Thursday September 24, external auditors Grant Thornton said the council had made progress in delivering project to restructure council services to be less expensive. But the report added: “There is much work to do to embed arrangements and deliver savings at scale and pace in order to mitigate the risk of requiring further EFS exceptional financial support in the future.”
“Exceptional financial support” is the name given to the emergency power to raise more money which the government can give councils which are about to go bust. It does not mean the council gets any money from the government, but it may get permission to fund its revenue budget through borrowing, selling off its assets, or increasing council tax by more than the 4.99% cap.
The council had faced a budget gap of £25m when it requested exceptional financial support from the government last year, whereas its budget gap for next year is forecast to be £12.1m. Council leader Mike Bell told North Somerset Council’s cabinet meeting on September 16 that this figure had doubled since February, largely driven by increasing social care costs. He added that it already took into account a council tax increase of the normal maximum of 4.99%. There was no mention of a risk of future exceptional financial support.
In a statement after the meeting he said: “Residents have already faced a substantial council tax increase, and we know how hard that is on household budgets. They deserve a clear explanation of why the council still faces a funding gap and what we will do about it.”
He said: “At the heart of this financial pressure is the need for fair funding for care. Almost every pound we raise in council tax is swallowed up by social care costs, leaving precious little for other essential services. Yet government keeps passing the bill to households through an outdated tax based on property values from 35 years ago, which falls disproportionately on modest homes and takes too little account of ability to pay.
“Council taxpayers cannot keep picking up the tab for a national care funding crisis. Government must fund care properly.” 65% of the council budget is spent on care care and support services for adults and children, early years services and welfare, and costs in this area continue to rise.
Mr Bell added: “We will shortly launch an engagement exercise to hear which council services matter most to residents and help shape our budget proposals. Residents will then have the opportunity to comment on the draft budget in December.”
Government reforms are seeing the funding the council receives from the government reduced by £18.6m over three years. The council is expected to receive £6.2m less from the government in 2027/28. The additional annual income generated by the 8.99% council tax increase in April was about £6m.
The council will publish a draft budget in 2027/28. After a public consultation, the full council will vote on approving it in February 2027.