Somerset Council has warned that rural communities are set to feel the impact of national funding changes as it prepares to set its budget for 2026–27.
New papers show the authority has reduced its projected funding gap from £101m in March 2025 to £25m in February 2026, but the progress has been undermined by the Government’s recent fair funding review.
Council Leader Cllr Bill Revans said the removal of the “remoteness factor” from national calculations has made the challenge significantly harder for rural counties like Somerset.
“Clearly it costs more to deliver services like road maintenance, waste collections and school transport in geographically‑spread, rural areas,” he said.
The Council estimates it will lose around £21m as a result of the change – the third‑highest reduction in the country. Cllr Revans added that Somerset will also receive nothing from the Government’s £1bn recovery grant.
“We’ll be asking the Government to publish their findings and explain how this is in any way fair funding,” he said.
As part of the budget proposals, the Executive will consider a 4.99% Council Tax increase. If approved, the average Band D household would pay £1,950.30 a year – still lower than the average unitary authority and below neighbouring Dorset, Wiltshire and Cornwall.
Cllr Revans said the system leaves Somerset at a disadvantage. “The Government uses a notional Band D figure of £2,060 to calculate funding entitlements, but our income is much lower.”
“If we actually received this level of funding, we would not have a budget gap. We’re being hit twice – we receive less income from Council Tax and less through grants, and we’re penalised for being a rural authority.”
To close the remaining £25m gap, the Council will need to reduce cost pressures, find further savings and again request Exceptional Financial Support from Government in the form of a Capitalisation Direction, allowing day‑to‑day spending to be covered through borrowing or asset sales.
Somerset Council’s budget will be discussed at Executive on 25 February, before final decisions are made by Full Council on 4 March. Agendas and papers will be published in advance, with the public able to attend in person or online.
