Connect with us

Business

Somerset Council ‘not in territory’ of going bankrupt within 12 months, says interim finance chief

Published

on

Business Live

The council is currently in the throes of setting its annual budget, with rising demand for services

Somerset Council's Headquarters at County Hall on The Crescent in Taunton. CREDIT: Daniel Mumby. Free to use for all BBC wire partners.

Somerset Council’s Headquarters at County Hall on The Crescent in Taunton(Image: Local Democracy Reporting Service / Daniel Mumby)

Somerset Council is “not in the territory” of effectively declaring bankruptcy within the next 12 months, says its interim finance chief. The council is presently grappling with setting its annual budget, as escalating demand for services and the continually rising costs of meeting these needs make balancing the finances increasingly challenging.

Advertisement

The council’s forecasted budget deficit for 2026/27 has significantly reduced from £73m in December 2025 to approximately £41.4m a month later – although it will still be dependent on extraordinary financial aid from the central government to bridge this gap.

Clive Heaphy, the council’s interim chief financial officer, expressed that he was not immediately concerned about the council’s ability to set its annual budget, adding that he anticipated the projected budget shortfall to decrease further once the government confirmed the final local government funding settlement.

Mr Heaphy discussed the matter extensively when the council’s corporate and resources scrutiny committee convened in Taunton on January 28.

He said: “We have probably moved slightly away from a financial emergency, but let’s be clear: we still have deep issues to do with our budget and balancing our finances, and we still have a lot of work to do. We need to match our spending to our income without reliance on exceptional financial support, reserves or one-off savings.

Advertisement

“You will recall that had a gap coming into this year originally of £101m, representing some 17 per cent of our net revenue budget – that’s a very large deficit by any measure.

“The gap as reported in December was down to £73m, and is now down to £41.4m. By the time we get to the executive [on March 25], we will be moving towards a figure starting with a three, and the likely figure is likely to be in the mid-thirties [millions].”

To bridge the outstanding shortfall, the council is substantially dependent on exceptional financial assistance from central government – which permits the council to utilise the proceeds from disposing of land, property and other assets to fund everyday expenditure (something which is not ordinarily allowed).

The council can only increase its share of council tax bills by a maximum of 4.99 per cent without prompting a referendum, with the Ministry of Housing, Communities and Local Government (MHCLG) rejecting any higher rise in the final local government finance settlement on Monday (February 9).

Advertisement

The council operates a council tax reduction scheme which offers support for residents who are finding it difficult to pay council tax – with Mr Heaphy noting that the current scheme meant that the equivalent of 12,800 Somerset residents were contributing no council tax whatsoever.

If the council fails to legally set its budget by 11 March, it will be forced to issue a Section 114 notice and declare effective bankruptcy – resulting in the MHCLG dispatching commissioners who can implement sweeping changes with minimal democratic scrutiny.

Mr Heaphy said: “I am pleased to say that this year, we are not in Section 114 territory of at the moment.

“While the reserves are not the levels where we need them to be, I don’t think they represent a risk as long as we are not calling on them for regular, day-to-day spending.”

Advertisement

Councillor Dave Mansell (who heads the opposition Green group on the council) suggested that the council’s choice to spend proceeds from asset sales on its ongoing transformation programme might not deliver value for local taxpayers.

Mr Mansell (who represents the Upper Tone division near Wellington) said: “We have relied a lot on the capitalisation, and I tend to think we’ve relied on that too much – we’ve avoided doing something better with that money.

“We’ve had 15 years of cuts and savings to local government; there have been many painful decisions over those years, and it’s still going on. Our officers are overstretched, having to do too much and are struggling to keep up with everything – I’m sure we all see that.

“It looks like the budget gap will be closed through a council tax increase – I think we have to look at that, given our circumstances.

Advertisement

“Those who don’t want to pay more council tax will have to say which public services they don’t want any more . We’ve already dropped some that we should have kept going.”

Councillor Henry Hobhouse (Liberal Democrat, Castle Cary) argued the council would never achieve financial stability without comprehensive social care reform.

He said: “In my division, I have Chilton Cantelo special needs school and six different adult social care homes – almost every single one of which are now owned by financial institutions in London.

“It is a complete and utter disgrace the amount of money that is being charged by special needs schools – it is more expensive to send a child to Chilton Cantelo than it is to send a child to Eton, and it really isn’t good enough.

Advertisement

“Somebody higher up than me and this committee has got to do something about it.”

The council’s executive committee will reconvene on Wednesday (February 11) to examine rental levels for the authority’s housing portfolio, rather than addressing the complete budget as initially scheduled.

A dedicated executive session will follow on February 25 to scrutinise cost-saving proposals, fee adjustments and any additional measures that might be required once further Government guidance arrives.

The full council will convene at the Canalside conference centre in Bridgwater on March 4 to ratify the budget. Should the budget fail to gain approval, a backup full council meeting has been arranged for March 6 at the same location, with a reserve executive date set for the day before.

Advertisement

Following the budget’s approval, the council will name a permanent successor to Mr Heaphy. The senior management appointments and employment committee is scheduled to convene in a confidential session on Monday evening (February 16) to discuss this matter.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Middlefield Banc earnings missed by $0.27, revenue fell short of estimates

Published

on


Middlefield Banc earnings missed by $0.27, revenue fell short of estimates

Continue Reading

Business

Pegasystems shares fall 5% as net income declines YoY, despite better-than-expected Q4

Published

on


Pegasystems shares fall 5% as net income declines YoY, despite better-than-expected Q4

Continue Reading

Business

Tyson Foods sees long road before Beef business recovers

Published

on

Tyson Foods sees long road before Beef business recovers

The US cattle herd is the smallest since 1951. 

Continue Reading

Business

Wrapped helps Spotify add users despite artists criticism over fees

Published

on

Wrapped helps Spotify add users despite artists criticism over fees

It highlighted its “Spotify Wrapped” feature for engaging users.

“Our 11th annual Wrapped was bigger, bolder and more layered than ever, celebrating fans, artists, creators and authors around the world,” it said in its results. “Wrapped had more than 300 million engaged users and more than 630 million shares on social media globally in 56 languages”.

Chief executive Gustav Söderström said the firm considered itself the research and development department of the music industry, by focussing on new developments in audio, such as adding video to podcasts, and embracing music made by artificial intelligence (AI).

“Our job is to understand new technologies quickly and capture their potential, which we’ve done time and again,” he said. “The entire industry stands to benefit from this [AI] paradigm shift but we believe those who embrace this change and move fast, will benefit the most.”

Advertisement

But the latest revenue figures come as a heated debate continues about how much money artists and songwriters receive in royalties. Various artists boycotted a Spotify party in 2025, and Taylor Swift famously refused to put her work on the platform for three years because the platform didn’t pay enough.

Continue Reading

Business

J&J Snack introduces protein-packed pretzels

Published

on

J&J Snack introduces protein-packed pretzels

First-of-its-kind products part of SuperPretzel brand.

Continue Reading

Business

Who Is Buying UK Shops in 2025

Published

on

With today marking three weeks since Liz Truss was appointed the UK Prime Minister has revealed that despite consumers reduced spending power in the wake of record inflation and the energy crisis, independent retailers are having to rely on the support of consumers and their local community

Physical shops are still very much in demand in the UK.But who is buying shops in 2025?

Read on as we explore who is buying UK shops in 2025.

Big Companies and Investment Funds

New research from BusinessesForSale.com states that big companies may buy multiple shops that have the potential to be financially profitable. And in some cases, they may be willing to invest in one established shop. These buyers include private equity firms, and these groups may be seeking to improve shops through operational overhauls. Often, private equity firms are aiming to see high rental income and shop growth within a set timeframe. They’ll look for business sales in the UK that can meet their financial goals.

New Buyers

Not every shop buyer already has a portfolio of businesses under their belt. New buyers could be individuals making the transition to ownership roles or younger buyers ready to start their journey. New buyers may find it more difficult to secure financing since they don’t have a track record of success. They’ll need to seek out smaller stores, including bakeries or restaurants, that don’t require a lot of major repairs. And new owners will want to make sure they’re clear about lease payments. Not knowing payment terms can lead to unpleasant financial surprises.

Franchisee Buyers

Franchisee buyers run a shop using a known brand and business model. Working within a franchise scenario can reduce stress, as owners won’t need to revamp a business from scratch. Instead, they’ll have an established system that already appeals to customers. Franchisees should expect to pay some fees for this level of convenience. But those costs also afford them training and advertising opportunities provided by the franchise.

Advertisement

Buyouts from Staff Members

It’s not always outside individuals buying shops in the UK. Sometimes, staff members connected to a shop will choose to purchase it as part of an employee buyout. Staff members will be familiar with the nuances of the given business and know many of the internal business strategies. And, as a result, they’ll be positioned well to operate it effectively. Even so, staff members should be prepared to work with landlords and shore up the money needed to pay the lease. All buyers should be prepared for fit-out liabilities and landlord demands, too. For staff, buying a shop from an owner isn’t always as easy as it seems.

Buying UK Shops in 2025

Buying UK shops can be an invigorating and lucrative experience. And the people doing the buying range from established private equity firms to new buyers seeking their first business opportunities. Working within a franchise system can take some pressure off buyers. And staff members with longstanding connections to a shop may have an advantage over new buyers without existing connections. Ultimately, buyers in the UK should survey the options and choose businesses that align with their financial status and goals.

Advertisement
Continue Reading

Business

Nektar Therapeutics (NKTR) Discusses 36-Week Maintenance Results From Phase 2b REZOLVE-AD Study in Atopic Dermatitis – Slideshow

Published

on

OneWater Marine Inc. (ONEW) Q1 2026 Earnings Call Transcript

Nektar Therapeutics (NKTR) Discusses 36-Week Maintenance Results From Phase 2b REZOLVE-AD Study in Atopic Dermatitis – Slideshow

Continue Reading

Business

US consumer spending slowed in December – Is it a warning for the economy?

Published

on

US consumer spending slowed in December - Is it a warning for the economy?

Retail sales were unexpectedly flat in December as consumers pulled back, raising questions about a broader economic slowdown.

Continue Reading

Business

Bristol sewing company destroyed by ‘devastating’ fire launches fundraiser

Published

on

Business Live

The studio was engulphed when a fire broke out at Broadmead Industrial Estate last month

Chantal Preston and Ruby Baker's sewing company was destroyed in a fire last month

Chantal Preston and Ruby Baker’s sewing company was destroyed in a fire last month(Image: RC Designs)

A pair of Bristol friends whose sewing company was destroyed in a fire last month are raising funds to relaunch the business. Chantal Preston, 35, and Ruby Baker, 25, established RC Bespoke Designs early last year, working from a studio in Keynsham.

The duo joined forces after meeting through Bristol’s Narrowboat community, and set up on Broadmead Industrial Estate where they made bespoke soft furnishings.

They had already secured work with a number of local businesses, including landing their first large-scale job – an awning for the marina – and were preparing a big social media launch when disaster struck.

On January 19, a fire broke out on the industrial estate and in less than an hour, the flames had torn through multiple buildings, including Chantal and Ruby’s offices.

Advertisement

Twelve Avon Fire and Rescue engines were called to the scene but the rented studio and all its contents were destroyed. It is still not known how the fire was started. One person was taken to hospital at the time, but nobody was badly hurt, according to Chantal.

The fire at the industrial estate in Keynsham in January

The fire at the industrial estate in Keynsham in January(Image: Handout)

“We are incredibly grateful that no one was seriously hurt, but the loss has been overwhelming,” she said.

“This studio wasn’t just a business, it was our livelihood, our creative home and a place we poured our time, money and heart into. Our studio was an attic space…the roof and second floor no longer exist. It didn’t stand a chance.”

Chantal and Ruby lost years worth of tools, stock and client’s work which was ready for collecting, as well as personal life storage.

Advertisement

“It was all gone in an instant,” she said.

The pair have now set up a Gofundme page in the hope of raising enough money to get back on their feet.

“We desperately need the help of our community,” said Chantal. “Our work is impossible without tools and a space to work.”

Chantal and Ruby have been provided with workspace for three months for free, but still need to restock tools and equipment including a pattern master; thread; fabric; iron; shelving; storage; tables for sewing machines; a large table for cutting fabric; metre rule; rotary cutter; adjustable chairs; and a cutting board.

Advertisement

“If anyone could spare a moment to check out and share our fundraiser on GoFundMe it would mean the world,” added Chantal. “Small businesses have to fight really hard to come back from losses of such devastation, and oftentimes don’t succeed alone, especially in this crazy climate.

“We also would welcome any haberdashery tools, or machines, that people may be selling cheaply, or throwing out. We’d love to give them a new home.

“Thank you for supporting us during one of the most devastating moments of our journey. We can’t wait to rebuild and come back stronger.”

Advertisement
Continue Reading

Business

Grupo Bimbo adds Takis innovation

Published

on

Grupo Bimbo adds Takis innovation

The cheese snacks are offered in two flavors. 

Continue Reading

Trending

Copyright © 2025