Public spending in West Devon may be cut next year because West Devon Borough Council has not received the government grant it expected.
West Devon Borough Council leaders say that whilst they were relieved that the government has kept its funding promise, the grant increase of just 1.7% goes nowhere near meeting the authority’s cost pressures of more than £700,000 for 2010/11. The council will receive an extra £74,000 in government grant towards funding its services for the next financial year.
The money forms just a slice of the council’s annual income and will have a bearing on council tax levels to be set in February 2010 for the next financial year.
The demand on council services has increased dramatically, whilst income from investments has dropped significantly. For example, housing benefit and council tax benefit claims to the council have doubled over the last year. In the first six months of the last financial year, the council dealt with 797 new claims. For the same period this year, the number of claims has increased to 1,433.
The council’s investments have been badly affected by historically low interest rates. Previously in 2007/08, income from council investments realised just over £700,000 whilst this year it will be only around £100,000.
The council has still found savings and extra income of more than £400,000 from its current £8.6 million net budget but is left with a shortfall of just under £300,000.
The council has a package of measures to help small firms through these uncertain times with, for example, hardship relief assistance, rural rate relief and small business rates relief. The authority is also striving towards paying small businesses for goods and services within 10 days of receiving their invoice.
Cllr Mrs Margaret Garton, Chairman of the Council’s Strategies and Resources Committee, said: “The government is predicting council tax rises to be around 3%, which would be the smallest rise for 16 years. Currently it is too early to say how much West Devon’s portion of the council tax bill will be.
“We are more than aware that personal and business budgets are tight and we will do everything we can to keep any council tax increases as low as possible.
“In the last three years, the council has saved £400,000 in total from sharing some of its services with South Hams District Council. The council decided earlier this month (November) that they would move forward with sharing further services.
“Whilst this year’s grant announcement was as expected, our main concern is what will happen next year, particularly as public spending is likely to be cut even further.”
West Devon is one of the most sparsely populated districts in the country with a population of just over 52,000, yet it serves an area equivalent to the size of Greater London. The authority is the smallest staffed district council in the country.
The impact of its small population means that the Council’s capacity to raise income is limited. An extra one per cent increase in council tax only raises an extra £38,000.
http://www.tavistockpeople.co.uk/news/West-Devon-Grant/article-1558876-detail/article.html