Somerset to explore higher council tax rise to help mitigate £54m budget gap
Somerset Council will continue to operate as if a section 114 notice has been issued after newly-proposed savings for 2025/26 of £43.95m will still leave it facing a forecasted budget gap of £53.85m next year. The authority required Exceptional Financial Support from the government to set a balanced budget in 2024/25, and there is a “risk” this will be needed again next year, according to a council report on budget proposals from 2025/26 to 2029/30. Given this situation, Somerset said it would explore whether it could raise council tax over the maximum threshold and will write to the Ministry of Housing, Communities and Local Government (MHCLG) for clarification.
Even so, the report highlighted that “a clear and significant programme of activities” will be required to avoid “the position where a section 114 notice needs to be issued”, but it stated that this programme of activities has commenced.
Housing151 | March 2025 | Local authorities. Providing homes.
Welsh government announces £120m in additional funding
The Welsh government has confirmed a £120m package of additional funding for 2024 to 2025 to support local authorities. Cabinet secretary for housing and local government Jayne Bryant said the funding was intended to support delivery of services in “crucial areas” such as education, social care and housing. Some of the funding in the package was included in the £157m for the Welsh First Minister’s priorities, which was announced at the beginning of the week. Local authorities will also receive some additional funding to support domiciliary care in 2024 to 2025 following a decision by the Welsh government to retain the £100-a-week maximum charge for home-based care.
The additional funding for local authorities includes £52.3m to support local government pay pressures for 2024 to 2025; £10m invested in social housing; £10m for reablement services to increase community-based care and improve hospital discharge; £30m to support schools; and £18.2m for the 2024 to 2025 teachers’ pay award.
LGA calls on government to take action on Local Housing Allowance rates
The government should uprate temporary accommodation subsidy rates to 90% of 2024 Local Housing Allowance (LHA) rates, the Local Government Association (LGA) has said, after it found that frozen LHA rates over the past five years have left councils with more than £700m in costs that they are unable to claim back from government. Homeless households placed in temporary accommodation are able to claim housing benefit to go towards their housing costs. Councils pay the cost of that housing benefit upfront and are paid back by the Department for Work and Pensions (DWP), the LGA noted, but the amount councils can claim back is currently capped to 90% of LHA rates from 2011.
“These rates have massively failed to keep pace with rising rental prices and the increased demand for temporary accommodation,” the LGA said. “This means that if the cost of the housing benefit claim is higher than those rates, the local authority has to pick up the cost.”
The LGA is also calling for the government to reconsider its decision to keep LHA rates frozen for other types of accommodation until at least April 2026 “to protect them from ongoing spiralling homelessness costs”.
Government pledges 150 planning decisions on infrastructure projects
The government has pledged to make planning decisions on at least 150 major infrastructure projects this Parliament as part of the ‘Plan for Change’ programme announced by the Prime Minister. The new milestone calls for “turbocharged” decisions on major infrastructure projects, while the consenting process will be “simplified”. If the pledge is delivered, it would mean a significant increase on the 57 decisions made in the previous Parliament. The government’s pledge to deliver 1.5 million homes was also confirmed.
The forthcoming Planning and Infrastructure Bill will set out how the delivery process for infrastructure can be streamlined, the government said. New 10-year strategies for housing and infrastructure will also be published next Spring, it added.
Audit Wales highlights dangers of lack of longer-term focus
Local government in Wales is “financially unsustainable over the medium-term unless action is taken”, according to a new report from Audit Wales. Many of Wales’ 22 councils “require a step-change in approach to move beyond setting an annually balanced budget to achieving value for money and financial sustainability over the medium-term”, the organisation found. Few councils have a “comprehensive understanding” of how they will close their projected budget gaps over the medium- to long-term, beyond the next two years, Audit Wales said, leaving them at risk of not securing value for money over the longer term.
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