Agenda item

An update on Somerset Council's Financial Position

An urgent item that has been brought forward due to the parishes currently setting their precepts for the forthcoming financial year.


Cllr Theo Butt Philip, the Lead Member for Transformation and Resources took questions about the Council’s current financial position. This followed a letter being sent to the parishes from the Leader Cllr Bill Revans, addressing the subject of asset and service devolution. (A copy of the letter can be viewed here).


A slide pack explaining the Council’s financial position and where the budgetary pressures lie can be viewed here.


Questions from the floor were raised as follows:-


Crowcombe PC – The parishes were very small, with limited funds and small precepts. Even with an increase on the precept, how could some of these assets and services be financed? And what would happen to them if the parishes didn’t have the capacity or capability to take them on?

A: It will depend on demand for the asset and or service and will be tailored to suit the work and parish needs. Services are provided in different ways across the county, so this will need to be evaluated on a case-by-case basis. In some instances, if the parish does not take on the work required, then this service is likely to be cut.


West Quantoxhead PC – The smaller parishes don’t employ full time staff, and some clerks only work a few hours a week. All of the parish councillors are volunteers, and don’t want the responsibility of managing staff. How will this be managed if assets/services are devolved and staff are TUPEd across?

A: Parish Councils are different sizes and already have varying responsibilities. Somerset Council will offer advice and assistance to those parishes who wish to take on additional assets and services.


Old Cleeve PC – Cllr Ian Duncan:Why did it take so long for the Council’s financial position to come to light, and then why such a rush to get out the letter about devolution? It has landed very badly!?

A: The new Council has been winding up the financial affairs of the 5 legacy councils and has been working with a new finance system. Somerset Council was aware there was an issue but not the scale of the problem until it started actively looking at the budget setting process for the next financial year. It also had to consider what grant would come in from central government and any reserves that it held. Once the problem was identified it was important to let the parishes know as soon as possible, especially in light of their precepting process. It was recognised that it might not have been great timing, but if it had waited, then most parishes would have already submitted their precept application for the 2024/25 Financial year. The letter was sent out to give the parishes an awareness of the current challenges.


Watchet TC – Cllr John Irven - The timing of the letter landed badly. Watchet TC already ran a youth club (following SCC withdrawing the youth service in 2012), a community library, the Esplanade and the former WSDC public toilets in the town. It was very late in the precepting process to advise the parishes that they may need to raise additional precept, especially with no hard financial figures to back up the fact. It was not ethical or legal to precept on “fresh air” or to precept for reserves that may or may not be needed. Much more information was required, if Watchet TC was to consider taking on this work.

A: Any parish that wished to find out more needed to contact the devolution team expressing an interest.


Cllr Rosemary Woods – Asked what was being done for good fiscal management? Had concerns that the democratic process and the Executive set-up itself may be draining much needed money. (One example being the payments to Executive members, and their deputies, and the special duties costs).

A: All current systems, processes and costs are being scrutinised across the Council. Executive members don’t have deputies, and the set-up of the Executive is being examined. The Council is looking to identify savings, right across its services which will include the democratic processes as well as the ones identified in the letter.


Minehead People and Place Partnership – Online – Fiona Toms asked what was being done with premises and staffing? These were the biggest costs in the delivery of services and where most savings could be made.

A: It was true that premises costs had significant impacts on the budget especially around the payment of utilities. This was being addressed in that there was a rationalisation process taking place which would look at the sale of some of the Council’s buildings. In the short term, parts of County Hall, and some areas in Shepton Mallet were being “mothballed” over the winter and the staff who worked there, relocated to alternative sites. This was to reduce the utility bills and make savings on heating and lighting during the winter months.


Old Cleeve PC – Cllr Ian Duncan - The service costs of the suggested services that may be devolved need to properly costed. The parishes will absolutely NOT precept where there is no business case stating how the costs are broken down and what they will be expected to cover. It is unlikely that this will be received in the available remaining time, and as such they are likely to be lost.


Minehead Coast Development Trust – It was difficult to understand how splitting and fragmenting the service was going to be more cost effective overall. It was very sobering to consider that it was going to be the Council Taxpayers who were going to be hit hardest in the pocket.


SALC – Loretta Whetlor said that in the rural areas, the only possible way of delivering services was through the clustering of parishes and working in collaboration. This was effectively creating a “mini district council” but without the benefit of paid staff and a reliance on volunteers. Assets could be transferred but there would be legal implications and it would take time.


Williton PC – Cllr Ian Aldridge asked what was happening with the former Somerset West and Taunton Council commercial property investment portfolio? He was aware that the former district council had bought commercial properties to the tune of nearly £100million and used the income generated to fund revenue services. Was this likely to continue or were these likely to be sold?

A: All the 4 district councils had assets that are being assessed. These are made up of the main Council buildings, as well as commercial properties. These are still performing and bringing in a small profit, but it is likely that the Council will have to use capital receipts to reduce deficits. Central government is unlikely to help especially if there are perceived assets to sell. Capitalisation will be achieved through selling these properties and not via borrowing. Any sales must be managed sensibly to ensure the properties are not sold at a loss.


Carhampton PC – Cllr Brenda Maitland Walker – the former WSDC had already devolved a lot of assets to parishes, and there were only a few left. It would be sensible to set up a working group to look at how the remaining ones could be managed. It was recognised that it was very uneven across the county, because different districts had different methods of delivery.

Cllr Brenda Maitland Walker asked who would be responsible for picking up the legal costs? This would be a consideration and would make the parishes reluctant to pick up the bill. (Historically in West Somerset, the former district council picked up the legal fees when it transferred the public toilets across).


A query was raised on running the LCN meetings and how much was budgeted for this? There were a number of officers in attendance and this must impact the cost.

A: The annual budget for all 18 LCNs in the first year was £300k. Two of the staff highlighted by the questioner were not employed by Somerset Council but were in fact CCS village agents. Kali Martin (Highways) was in the room and advised that he attended LCN meetings in his own time as a point of interest and was not obliged to be there. There was a lot of goodwill involved in the facilitation of LCN meetings across Somerset.