Mike Bell cabinet exceptional council tax
North Somerset Council says it 'almost certainly' needs exceptional council tax increase
North Somerset Council says it “almost certainly” needs to increase council tax by more than the 5% cap as it is set to lose millions more than expected in government funding.
The council has asked the government for permission to increase its council tax above the level it is usually capped at, as part of what is called exceptional financial support. Council leader Mike Bell told a council cabinet meeting (Wednesday, December 10): “I cannot give you an assurance that we can avoid a section 114 and a bankruptcy position without exceptional financial support.”
He said: “A key driver of that is the decision of the government to change the funding formula, which is absolutely ripping further funding away from local services. There is no question that that has been the straw that has broken the camel’s back.”
The “fair funding review” had been expected to see the council lose £17.4m in government funding — but now a revised calculation suggests it will actually cost the council £23.8m over the next three years.
Mr Bell said: “For many years, North Somerset has had one of the lowest levels of council tax in the region. Whilst that might have superficially sounded attractive, it has meant less money coming in every year. When you add in proposed changes to the funding formula and rapidly rising demand, the gap in our budget has simply become too big.”
He added: “We have identified significant savings, efficiencies, and income proposals, many of which are already underway through our productivity and transformation programme but a residual gap remains — with our reserves too limited to cover it.
“It is therefore the case that higher council tax rises are now unavoidable if we are to keep essential services running and avoid a financial crisis. Without them and without permission for exceptional financial support from the government, then social care, vulnerable children’s support, and basic infrastructure will experience more cuts and measures to reduce our spending to the legal minimums only.”
Exceptional financial support does not mean councils receive actual money from the government, but that they are granted flexibility to raise money in ways councils are usually not allowed to, such as increasing council tax beyond the usual cap or borrowing to invest in creating savings.
Council tax increases are usually capped at 3% with councils, such as North Somerset, that have adult social care responsibilities able to add another 2% on top solely to fund those services. Last year, Somerset Council increased its council tax by 7.5% after it was given permission by the government as part of exceptional financial support.
Mr Bell said that North Somerset Council’s decision to apply for the support was a “last resort.” He said: “This is not a situation that we want to be in but we are hamstrung by historic decisions on council tax levels and then demand and cost pressures for social care which are outside of our control.”
He added: “Every pound we raise from higher council tax rises we will use to protect essential services, especially for the vulnerable, and we will be fully transparent and open about how the money is spent.”
Asked if receiving exceptional financial support would mean it could avoid issuing a section 114 notice, Mr Bell said: “Hopefully but not necessarily.” He warned that costs for social care were still continuing to increase. He said: “There is a point not too far away where the cost of providing these services exceeds the total possible budget available and a one off exceptional financial support flexibility may not be enough to stave that off.”
He added: “Only change to the system is going to fix this. We can ask for exceptional financial support; it will help us to get through 26/27 but it won’t change those fundamentals, and that’s where we need government action.
“And simply taking money from areas that have been low spending, low taxing, efficient, well run councils like North Somerset and sending it north is not a solution.”
Mr Bell previously told the Local Democracy Reporting Service that some individual children had support packages costing the council hundreds of thousands of pounds. He said the costs had quadrupled in recent years while the council’s ability to raise money had not.
Last year, the council took £9.1m out of its reserves to balance its budget for 2025/26 but it still had to make major cuts which one councillor said would “strip our services to the bone.” Three local libraries are “highly likely” to be closed under the cuts, which also saw the council magazine axed and councillors’ allowances frozen.