Somerset CC's leader, Cllr David Fothergill, has denied the council is about to issue a Section 114 notice and has promised the council will deliver a balanced budget.

Cllr Fothergill issued a denial after a report to senior councillors said a Section 114 was an option as it desperately tries to identify extra in-year savings amid a projected net overspend of £12m.

A report to cabinet read: ‘Work is underway to reduce the predicted overspend but if that work does not materially change the prediction by the end of quarter two there is a risk that the council may have to take a number of urgent decisions to rectify the financial position.

‘An option that is available to the council, which is available to all authorities, is the issuing of a Section 114 notice, which imposes severe spending restrictions on the authority and brings into effect an emergency budget.

'The leadership team has been meeting weekly to identify ways of reducing our spending, our demand and ultimately therefore the gap between income and expenditure.'

Senior councillors this week approved the transfer of £5m from the council's contingency fund to the children and families department, where forecast expenditure for 2018/19 is said to be ‘even higher than last year with placement costs and transport costs continuing to increase’.