Why West Somerset Council is at risk of going bust

The smallest council by population in England is struggling to survive.

A recent Local Government Association report said West Somerset District Council was "not viable" in the long term.

BBC News looks at what went wrong and how it plans to move forward.

How did the council get into this situation?

The fundamental problem for the council is a lack of income from a low level of council tax - the difficulty is down to the high costs of providing local council services over such a sparsely populated area.

Of its 35,000 residents, about a third live in Minehead, but much of the authority's 280 sq miles of coast and countryside falls within Exmoor National Park.

West Somerset Council covers a vast area from Minehead to Exmoor

Its situation was made worse when the government reduced its grant to the council by £1m a year as it tries to claw back the national deficit some two years ago.

Currently, after it pays Somerset Waste Partnership - which it has outsourced its waste and recycling to - the council has £3.8m a year to spend on services.

However on Wednesday, the government offered it a glimmer of hope as it increased its grant to the council by 0.9%. For the financial year of 2013-14, the council will now have about £3.9m to spend on services.

The government also said that small public authorities could be allowed to increase council tax by £5 a year. If the council is allowed to do this, it could be about £30,000 a year better off.

Shadow cabinet member Ian Melhuish said because of the government cut, any savings made were negated so it was "forever going backwards".

"Quite frankly in these times, things get more expensive," he said. "We seem to have to provide the same services for less money all the time - it seems nonsense."

What is being done?

Councillors have unanimously decided to go ahead with examining in more detail two options which would both vastly change the council.

One option is for it to be a commissioning authority whereby it would pay others - possibly another council or a private company - to offer services.

The second option is for it to be a collaborative council which would involve it working with others.

The councillors also agreed to work with Taunton Deane Borough Council to put together a business case on how they can work together and what savings could be made.

Council leader Tim Taylor said: "We are looking forward to playing our part in any shared arrangement with any council or councils."

Mr Melhuish said: "I felt we've been dragooned into a position where we didn't want to be.

"With lots of discussion - some of it acrimonious - we have come to what I think is a reasonable, positive way forward although I can't see that it will solve the problem in the long term."

BBC West's political correspondent Paul Barltrop said realistically, 99% of residents would not notice any difference, however the difficulties could be if circumstances change as outsourcing can be inflexible and contracts can be hard to change.

What about the council's staff?

The authority currently has 82 staff, two years ago there were 100.

The council is losing £100,000 a year

Mr Taylor said there was "bound to be job losses" but how many depends on government funding. He added that he hoped to be able to keep a "sizeable" number.

Some staff could go to work for whoever is commissioned to provide services.

Mr Melhuish said: "Employment in west Somerset is not at a high level and to lose that level of expertise will be very disappointing."

Liz French, from Unison South West, said the best outcome would be to keep as many as possible employed in the area that they were working in.

She said she was also concerned about what impact job cuts would have on the local economy.

Is there a deadline?

Mr Barltrop said all parties want to have a deal in place by the start of the next financial year.

"That is a very, very short timeframe and they've got to work out if it is going to make the savings they need because come what may, neither Taunton Deane or Sedgemoor (another neighbouring district council) are going to be rowing to the rescue with their chequebooks out - they're certainly not going to leave their taxpayers any worse off," he said.

What if this does not work out?

A referendum on whether to increase council tax by 39 per cent - which works out as £1 per week for a band D property - could be held after councillors decided to leave that option open. Residents currently pay £132.

Mr Taylor said if no business case could be made for West Somerset sharing or commissioning services, a Boundary Commission review would have to be reconsidered, an option he described as being currently opposed by both ministers and councils neighbouring West Somerset.