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Somerset leader vows to rebuild reserves, despite budget deficit

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The leader of Somerset CC has claimed his authority will turn in a balanced budget for the current and following financial year, but stopped short of guaranteeing the same for 2020-21.

In an interview with LGC David Fothergill (Con) said the council had made “difficult and tough” choices over cuts, meaning that its in-year overspend had reduced from £20m to £3.1m.

Cllr Fothergill said: “I’m not trying to get away from it; we have been under severe financial stress and that’s why we have literally rebuilt our budget from the bottom up this year.”

Council papers show the council’s projected budget deficit for 2019-20 had more than doubled in only six months, from an anticipated £8.6m in February 2018 to £19m.

Cllr Fothergill said this was largely due to a large reduction in revenue support grant from central government, along with a large overspend in children’s services. This overspend related to a failure to control costs within the department, accounting for almost three quarters (£14m) of the council’s total overspend.

The council’s chief accountant, Lizzie Watkin, warned in July that without a serious reduction in its overspend, the county might need to issue a section 114 notice by October, restricting any further in-year spending.

However, Cllr Fothergill said: “We were never going to be the next Northamptonshire CC [which published its second section 114 notice over the summer]. It was never going to be on my watch. I think we have gripped our finances very tightly, it does feel like we’re on the right track.”

To help reduce the council’s overspend, Cllr Fothergill said the council had delivered “70 lines of savings” through a “root and branch” overhaul of the budget - the first “reset” in six years.

While the county’s audit committee strategic risk report last month echoed a corporate peer review by the Local Government Association, warning that “reserves will not be sufficient to manage any in-year overspends”, the leader said he expected to “rebuild” the authority’s reserves.

According to the council’s figures, it experienced a 72.9% drop in total reserves in the five years between 2013-14 to 2017-18, falling from £89.8m to £24.3m.

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