THE system to decide how much money is given for services in Somerset is 'broken', a county leader has said.

David Fothergill, leader of Somerset County Council, has welcomed a National Audit Office report highlighting the massive strains on local government funding.

In the report, published today, the Government spending watchdog identifies a 49 per cent real-term reduction in government funding for local authorities in the last six years and calls for a long-term plan to address current financial and demand pressures.

Responding to the report, the Government said it was consulting councils on their funding needs.  

Councillor Fothergill said: “The mechanism through which central Government funds local government is broken and putting all local authorities under enormous pressure.

“We are managing those pressures, prioritising services for the vulnerable and making sure we have appropriate levels of reserves. We have savings plans and we are sustainable, but it is extremely tough.

“The Government’s Fairer Funding Review has to help councils like ours meet the needs of vulnerable residents and a sustainable, nationwide approach to the funding of social care must be a top policy priority.

“We have lobbied hard for this with the support of all of Somerset’s MPs and we will continue to do so.”

Key findings within NAO report include that:

  • Government funding for local authorities has fallen by an estimated 49.1 per cent in real terms from 2010/11-2017/18
  • Along with reductions in funding, local authorities have had to deal with growth in demand for key services as well as absorbing other cost pressures such as high National Insurance contributions, the Apprenticeship Levy and the National Living wage
  • Local authorities have protected spending on service areas such as adult and children’s social care
  • Spending is now more concentrated on social care
  • The Government has announced multiple short-term funding initiatives in recent years and does not have a long-term funding plan for local authorities.

In Somerset, the Government’s main grant to the county council has funding has fallen by £10m this year - and more than £73m since 2013/14.

Overall, the authority has made savings of around £120m over the last seven years - bridging the gap caused by falling funding and increased demand for services.

The report recommendations for the Ministry of Housing, Communities & Local Government include that it ‘develop a long-term plan that is genuinely able to address the current financial and demand pressures in the sector and secure its financial stability’.

You can click here to read the full report

Responding to the report, a Government spokesman said: "Last month, Parliament approved a funding settlement which strikes a balance between relieving growing pressure on local government and ensuring hard-pressed taxpayers do not face excessive bills.

"As part of this, we delivered a real terms increase in resources over the next two years, more freedom and fairness, and greater certainty to plan and secure value for money.

"We are currently working with councils to undertake a review of their needs and resources. Our consultation on this closes on Monday, and all responses will be considered as we look to devise a new funding system."