THE Government has ordered an investigation into why bankruptcy-threatened Somerset Council has been so slow to adapt to its unitary status.

The authority was created in 2023 through a merger of the then-county council and Somerset’s four district councils and within six months had declared itself to be in a state of ‘financial emergency’.

It has been battling ever since to avoid issuing a Section 114 (S114) notice, which is the local government form of bankruptcy, and for the past three years has relied on ‘one-off’ financial support from the Government to be able to balance its budget.

Now, Local Government Minister Alison McGovern has ordered an external assurance review of Somerset which will include ‘close scrutiny’ of the pace of transformation and ‘repeated requests to reprofile previously agreed support into future years’.

It will also look at significant concerns raised by the council’s external auditors, and their issuance of ‘statutory recommendations’, including addressing savings and transformation at pace.

Ms McGovern said: “This will also include consideration of if any further support or action is needed to ensure these issues are being properly addressed at local level.

“It is my clear expectation that this council takes robust action to address these specific risks and issues, as part of their wider plans for financial recovery.

“This Government has been clear that, while we will continue to support councils and recognise that improvements will take time, we will also expect councils to make sure they are doing all they can locally to deliver for residents and reach a sustainable position.”

Conservative opposition group leader Cllr Diogo Rodrigues said it was concerning that the Government had such significant concerns about the financial management of Somerset Council.

Cllr Rodrigues said: “This is a damning assessment.

“It is no surprise the Government turned down Somerset’s attempt to impose an 11 per cent council tax rise.

“When Ministers are highlighting serious concerns about transformation delays and financial control, why would they hand over permission for an above inflation tax hike?

“The Liberal Democrats have tried to blame everybody else for Somerset’s problems, the previous administration, national funding formulas, inflation, anybody but themselves.

“Yet, they have now been in charge for years.

“The responsibility sits squarely with them.”

Council leader Cllr Bill Revans said: “We have taken a number of decisive actions ourselves to protect frontline services while also avoiding the threat of a S114 notice.

“We welcome further scrutiny of our finances, and I would recommend anybody seeking to understand the historic causes of our financial situation to read the CIPFA report that is very clear on the cause of the financial issues Somerset Council faces being the reckless freezing of council tax for six years by Somerset County Council.”

Cllr Revans said the Government had agreed a ‘capitalisation direction’ for £30 million of assets sales to be used to cover day to day spending instead of capital expenditure.

He said £25 million would be used to help cover the council’s budget gap, and £5 million to support the further transformation of services.