Somerset Council is to get £607.9m from the government to run the local authority next year, a 5.6% increase on the year before.
However, the local authority says it is not enough to fill gaps in its funding and services outside of adult and social care could still be lost.
The deputy leader of Somerset Council Liz Leyshon has said this week that despite the grant increase it is “not anywhere near” the net cost increase needed to run services.
The Labour government has announced that it plans to give local councils in England an extra £2bn next year.
The Ministry of Local Government published its provisional Local Government Finance Settlement for 2025 to 2026 on Wednesday.
Labour announced a £700m package for authorities across England – many, such as Somerset, that are trying to avoid bankruptcy.
The Liberal Democrat deputy leader of Somerset Council Liz Leyshon told the BBC: “It’s not the best news. It’s not going help us close our gap.”
She explained that because of Autumn Budget announcements, including increasing the National Living Wage and the amount of National Insurance employers need to pay, the local authority will still be in financial trouble.
In October the projected budget overspend for 2025 to 2026 was estimated to be £50m.
Ms Leyshon also expressed concern about a portion of money Somerset Council normally receives for rural services being pulled in favour of a new national recovery grant.
She said it was “heavily skewed to urban areas”, despite it being more expensive to run services like school buses and waste collection recycling in rural localities.
Ministers have said that £600m will be allocated to councils according to their level of deprivation.
They believe this will make the system fairer because councils in poorer areas are less able to raise income locally, and a new formula will take into account “the impact of rurality”.
Ms Leyshon said at some point the council will need to ask if there are services, like arts and culture, it can no longer deliver because the commitment to adult social care and children’s services is so great.
Somerset Council will now send a letter to the government asking for permission to raise council tax next year above the 5% cap.
The local authority has continually argued that its revenue from council tax is much lower than neighbouring authorities, as previous Conservative administrations chose to freeze it.
Somerset Council will also be asking the government to extend the Capitalisation Direction, which has allowed it to use money from the sale of assets or borrowing to fund day-to-day services.
