A BANKRUPTCY declaration by Somerset Council may have been postponed for another 12 months after councillors on Tuesday (February 20) agreed a budget for 2024-25.

To balance its books the council agreed to axe up to 1,200 jobs, increase council tax by 4.99 per cent, take money from reserves, and stop £36 million of services, including public toilets, CCTV, minor highways maintenance, school crossing patrols, and some household waste recycling centres after negotiations with the contractor.

The council was facing issuing a ‘section 114’ notice that it could not meet its spending commitments for the coming financial year.

But on Tuesday it only managed to balance its day to day spending against income by including nearly £37 million it hopes to raise from selling assets such as buildings.

Income raised from such sales would usually have to be spent on capital items, such as property or equipment.

However, the council has asked Government to make a ‘capitalisation direction’ to allow the money to go into its revenue budget.

Local democracy campaigner David Orr, from Taunton, challenged the council in advance of the meeting that if the Government refused permission then the budget was no longer balanced.

The Government has already refused a request to allow the council to increase council tax bills by 10 per cent, double the amount by which it was legally permitted to rise.

Following Mr Orr’s challenge, council finance officer Jason Vaughan provided councillors with a ‘section 25’ report which gave an assurance on the robustness of the budget proposals and the adequacy of reserves.

But Mr Vaughan warned there was a ‘high level of concern around future years and the financial sustainability of the council’.

He highlighted the need for ‘new and significant savings’ in future years.

Mr Vaughan said: “Based upon current forecasts there is a high likelihood that a section 114 notice will need to be issued in respect of 2025-26.”

Council leader Cllr Bill Revans said: “Since declaring a financial emergency in response to the soaring cost of social care, we have done everything in our power to avoid a S114 notice.

“We have looked at all our non-statutory services to find savings and have taken a series of heart-breaking and unpalatable decisions, including cuts to services, increases to council tax, fees, and charges, spending reserves, selling assets and property, and embarking on a top-to-bottom transformation programme which will reduce the size of our workforce by more than 20 per cent. 

“Despite this, we are still reliant on the Government agreeing to a capitalisation direction, a short-term, one-off measure which, while welcome, does nothing to address the long-term issues.

“We have set a balanced budget, but it is clear that we have a broken model for funding local government and social care which urgently needs a national solution.”

Many town and parish councils across the county had earlier increased their own council tax bills to raise extra funds to meet the cost of continuing to run some of the axed services locally.