The Prime Minister has defended the government’s decision not to allow Somerset Council to increase its council tax by almost 10 percent.
Rishi Sunak said “it’s not right” for councils to add high tax increases.
Bill Revans, the Liberal Democrat leader of Somerset Council, said the government’s decision was “really disappointing”.
The local authority needs to find £100m to avoid going effectively bankrupt.
The Prime Minister told the BBC on Friday: “We have increased the funding for local councils across the country by about £600 million, which will mean on average councils will have about 7.5% more money to spend this next year than they did last year.”
He added if Somerset Council wants to hold a referendum on increasing council tax above the government cap of 4.99%, it has the ability to do that.
Rishi Sunak said the local authority is not doing that, which “presumably tells you they don’t think people will support it.”
He said he refused the council tax rise because he did not want to “unnecessarily burden” households.
Mr Revans declared a financial emergency in November, blaming a broken local government funding system and the spirally cost of adult social care.
He said his council’s ability to respond had been hampered by a historically low council tax rate – 49th lowest out of 63 when compared to other unitary councils in England.
Mr Revans said his formal request for a 9.99% council tax increase would have generated an additional £17.1m and taken the average band D council tax bill in Somerset to £1,810 – still below the unitary average of £1,815.
Several town councils in Somerset, like Yeovil and Taunton, are proposing to double or almost treble the council tax precepts it is asking residents to pay.
The authorities are not subject to a cap on how much they can increase council tax by.
The Prime Minister added: “The system is not meant to be used in that way. Historically people have respected that. It’s incumbent on local councils to be respectful of the demands on people’s family budgets and be restrained on the council tax rises authorities put in place.”
This week Somerset Council revealed it will not go bust in the near future, because it thinks the government will allow it to use borrowed money and money from selling off buildings to pay for day-to-day services for the next year.
After that, the council says the financial outlook for 2025 looks bleak.
Final decisions to set a balanced budget for next year will be taken by Somerset Council’s full council on 20th February.
