£1 million down to £145,000
The estimated shortfall forecast for Mid Devon District Council’s next budget has gone down more than £1 million to £145,000 – easing concerns about the authority’s financial position.
That’s if council tax rises £5 for Mid Devon’s element of council tax, based on a Band D property – a rise of 2.34 per cent – if the full council approves it later this month.
Last month, Mid Devon’s cabinet was told the shortfall was around £1.4 million – roughly 10 per cent of the general budget. But now a number of adjustments have cut that figure significantly, with the remaining gap coming from some of its reserves.
Presenting the budget to the cabinet this week, the member for finance, councillor Andrew Moore (Conservative, Clare & Shuttern), said it was a “remarkable achievement” considering the shortfall was originally predicted to be over £2 million in 2020.
Further challenges the authority had to face when setting the budget included a reduction of £1.1 million in government funding and the ongoing reductions to revenue as a result of covid. It’s also increasing fees and charges, for things like car parking, at below inflation rates.
The council’s policy development groups had previously been tasked with finding savings totalling half a million pounds to help reduce the shortfall, with cllr Moore saying “nothing was off the table.”
A report to the cabinet says most of it has come from adjustments to financing for capital projects, better than expected business rates growth and changes to the council’s reserves.
It concluded that the budget “has been set against a back drop of over a decade of cuts to public sector funding. However, the proposed balanced budget protects service delivery at current levels.
“This has been achieved with the use of a small amount of one-off funding from reserves and balances. Therefore, further ongoing budget savings options will need to be identified…”
The cabinet had previously been told the new local government finance settlement – given to all councils by Westminster – gives an increase to Mid Devon of just 0.82 per cent next year, which assumes the £5 increase in council tax.
However, due to inflation and lost income from covid, the council believes the settlement will actually amount to a “reduction in spending power” and says all local authorities need “clarity and certainty about how all local services will be funded over the next few years and beyond.”
Members of the cabinet recommended the budget be approved at a full council meeting on Wednesday 23 February.