SOMERSET Council appeared on Friday (March 1) to have survived the threat of bankruptcy for 12 months after the Government agreed it could sell assets to meet day to day bills.

The council agreed a budget last month for 2024-25 which was ‘balanced’ only by including £36.9 million of income from buildings and other assets it hoped to sell.

But the creative accountancy was dependent on the Government approving a ‘capitalisation direction’ to allow that income to help cover its £100 million budget hole instead of having to spend it on capital items as required in law.

On Thursday (March 29), the Department for Levelling Up Housing and Communities (DLHC) gave that approval under its Exceptional Financial Support framework for councils facing severe budget pressures.

The DLHC gave in-principle support for more than double the amount, a total of £76.9 million, some of it backdated to last year.

A DLHC spokesperson said Somerset’s leaders were told of the in-principle capitalisation support before setting the budget on February 20.

It was the fifth highest amount approved by DLHC out of 19 local authorities across England which were also facing financial pressures as they set their new budgets.

Somerset leader Cllr Bill Revans said although a balanced budget had been set, it was clear ‘that we have a broken model for funding local government and social care which urgently needs a national solution’.

Ahead of the budget setting, Communities Secretary Michael Gove refused a request by Somerset to be allowed to increase council tax bills by 10 per cent, double the limit allowed by law, which would have raised an extra £17 million.

Mr Gove said the authority already had powers to hold a public referendum to seek approval from ratepayers for the increase but had chosen not to do so.

Other measures approved by councillors to avoid issuing a ‘section 114’ notice, effectively declaring bankruptcy, included £35 million cuts to services such as public toilets, CCTV, and recycling centres.

It also approved up to 1,200 job losses, up to 26 per cent of its workforce, and taking nearly £37 million from its reserves.