A ‘CAUTIOUS’ welcome has been given by Somerset Council to a three-year Government finance settlement for local authorities.

The Government deal covers 2026-27 through to 2028-29 with more than £5 billion nationally of new grant funding, and will use ‘deprivation indices’ to decide how funds are distributed.

But the near-bankrupt Somerset authority still needs to seek Government permission to again increase council tax bills in 2026 by more than the permitted five per cent.

Last year, Somerset received special Government permission, known as ‘Exceptional Financial Support’ (EFS), to put up bills by 7.5 per cent without first having to hold a public referendum as legally required.

The Liberal Democrat-run council has admitted EFS will need to be applied for again in 2026, for a third year in a row as it continues to struggle to balance its budget.

Council leader Cllr Bill Revans said: “We have worked hard and had to make tough decisions to deliver savings, guided by feedback from residents, businesses, and partners, while protecting vital services.

“While the three-year settlement which has been announced contains some welcome news and allows us to plan with more certainty for 2026-29, we maintain our view that the current funding model is broken.

“Relying on increased council tax to fund essential, demand-led services such as adult and children’s care is not sustainable.

“Our work to deliver savings, innovation, and the vital services we know our communities value must be underpinned by a fairer, long-term funding system that recognises the pressures councils face and the work our teams deliver every day.”

Cllr Revans said the provisional multi-year settlement announced by Government looked as if it would mean an extra 13 per cent revenue funding for Somerset over the next three years.

He said while it looked like positive news, there was an assumption about 97 per cent of the increase would be raised from local residents through higher council tax bills.

It also appeared Somerset would lose out significantly on income received from the collection of business rates.

Cllr Revans said overall, Somerset was only likely to be ‘marginally better off’ next year, although more work was needed to fully model the ‘highly complex settlement’.

The council is currently inviting the public to have their say on its finances and services with a consultation open to everybody until January 14.

Cllr Revans said the consultation results would help influence councillors when they set their 2026-27 budget in February.

The budget consultation survey for Somerset, which declared a financial emergency in 2023, can be completed online, or paper copies are available in public libraries.