Somerset Council cautiously welcomes the provisional 3-year Local Government Finance Settlement for 2026-27, projecting a 13.5% rise in core spending power to £685 million, though much relies on council tax hikes. Six Liberal Democrat MPs representing Somerset seats have united to demand urgent talks with ministers, slamming the package as «profoundly disappointing» for offering just a 1% real-terms central grant increase amid rural cost pressures. Leader Bill Revans flags ongoing gaps in children’s services and homelessness support, seeking exceptional financial aid.
Settlement Overview
The UK Government announced the draft multi-year deal in late 2025, covering 2026-29 with final confirmation pending consultation. Somerset anticipates £252 million in central grants next year, up marginally from £249 million, alongside retained business rates and council tax flexibility. Core spending power growth sounds robust at 13.5% over three years, but 97% ties to local taxation, squeezing residents amid 4% inflation forecasts.
New consolidated grants bundle streams: Children, Families and Youth (£3.1 billion nationally), Adult Social Care boosts (£150 million extra in 2026-27), and neighbourhood services (£90 million). Revenue Support Grant absorbs legacy pots, while floors protect rural councils like Somerset from sharp drops.
Liberal Democrat MPs’ Campaign
Somerset’s Lib Dem delegation—Gideon Amos (Taunton & Wellington), Damien Egan (Wells), and others from North Somerset, Bridgwater, Yeovil, and Somerton—wrote jointly to Local Government Minister Lia Nici. They decry rural funding disparities: sparse populations inflate per-head costs for roads, buses, and care. Amos highlights social care’s «escalating expenses,» arguing taxpayers shoulder national crises unfairly.
Meetings sought within a week of January 6 announcements, leveraging coalition-era Lib Dem influence despite minority status. MPs cite Fair Funding Review 2.0 response, demanding Somerset’s needs formula adjustment. Cross-party support builds, with Tory backbenchers echoing rural gripes.
Council Leader’s Response
Bill Revans praised planning certainty from the multi-year view but warned of «broken» models. Somerset faces £20 million savings demands for 2026-27, atop £100 million cut since unitaries formed. Children’s placements and homelessness surge 25% yearly, outpacing grants.
Revans eyes Exceptional Financial Support (EFS) extension, having drawn £40 million in 2025-26. Budget consultation closes January 31, previewing 4.99% tax rises balancing statutory duties.
Financial Breakdown and Pressures
Core spending power hits £685 million, blending grants (£252m), business rates (£150m est.), and tax. Adult social care grant swells via £900 million RSG tranche over three years. Yet business rate losses loom significant, per early modeling.
Key strains:
- Children’s services: £80 million budget, 15% overspend projected.
- Highways: Pothole repairs double post-Storm Henk.
- Homelessness: Temporary accommodation costs up 40%.
Multi-year aid allows reserves buildup, unlike annual scrambles.
| Funding Stream | 2025-26 Est. | 2026-27 Proj. | % Change |
|---|---|---|---|
| Central Grants | £249m | £252m | +1.2% |
| Core Spending Power | £604m | £685m | +13.5% |
| Adult Social Care (extra) | Baseline | +£150m nat’l share | Varies |
| Business Rates Retained | £145m | £150m? | Uncertain loss |
Rural Funding Disparities
Somerset’s expanse—rural density half urban averages—hikes service delivery: gritters cover 5,000km roads, buses serve 100+ hamlets. Needs formulas undervalue sparsity, per MPs. Neighboring North Somerset fears £18.6 million hit, projecting £30 million total drag.
Government counters with floors and rural uplift in CYPS formula, but critics call tweaks insufficient. Lib Dems push formula refresh incorporating 2021 Census rural metrics.
Political Context
Labour’s minority government navigates choppy waters post-2024 hung parliament. Lib Dem confidence-and-supply deal grants leverage on devolution, housing. Somerset MPs time pressure amid Spring Statement whispers of uplifts.
Tories slam «austerity redux,» Conservatives locally back Revans’ prudence. Greens demand tax fairness over grants.
Budget Consultation Insights
Somerset’s poll drew 1,200 responses by January 12: 60% accept modest tax rises for services, 40% prioritize cuts. Proposals eye efficiencies: shared procurement, AI admin, green energy savings.
Executive meets February to set tax precept; full council March 11 finalizes.
National Local Government Picture
England’s £78 billion settlement averages 6.8% CSP growth, with social care nationalizing burdens. Consolidated grants simplify: Public Health £13.45 billion outside CSP. Caps limit big winners at £35 million/year.
Shire halls like Somerset fare middling; metros gain urban premiums. EFS sustains strugglers—15 councils so far.
Somerset-Specific Impacts
Unitary since 2023, Somerset bridges four ex-districts: Mendip, Sedgemoor, South Somerset, Somerset West & Taunton. Funding pools mask variances—coastal West Somerset needs outstrip growth corridors.
Projects at risk: Glastonbury Festival highways, Exmoor bus networks. Positives: school expansions ringfenced.
| Service Area | Pressure | Funding Link |
|---|---|---|
| Children’s Placements | +25% costs | CYPS Grant |
| Adult Care | Demand +12% | ASC RNF Boost |
| Highways | Storm repairs | Neighbourhood £90m |
| Homelessness | +40% temp accom | EFS Request |
MPs’ Demands in Detail
Letter outlines:
- Immediate £10 million rural uplift.
- Formula review by Autumn 2026.
- No council tax referendum thresholds blocking rises.
- EFS fast-track for Somerset.
Nici’s reply due week-ending January 17, potentially tabling EDMs.
Economic Backdrop
Somerset’s GVA lags South East at 85%, reliant on tourism, farming, nuclear (Hinkley). Inflation eases to 2.5%, but wages stagnate rural. OBR forecasts 1.8% growth, testing tax bases.
Council tax base grows 1.5% via housing, but empty homes drag.
Future Scenarios
Optimistic: Lib Dem talks yield £5-15 million extra, averting deepest cuts. Base: 4.99% tax, £12 million savings via efficiencies. Pessimistic: EFS denied, 7% tax, service trims.
Multi-year visibility aids MTFP to 2029.
Resident Actions
Submit to budget consultation by January 31. Attend parish meetings. Contact MPs via writetothem.com. Scrutiny via overview committees.
Settlement tests Somerset’s resilience, with Lib Dem advocacy amplifying rural voices. Balanced budgets ahead, but fairer shares remain the prize.
Nikhita Jose is a journalist and content writer covering local news, community affairs, and public interest stories in Somerset. She focuses on clear, accurate reporting and brings a thoughtful, reader-first approach to regional journalism.