County Council pushes tax bar to the limit

4.99% hike to stay afloat

Devon’s largest council looks set to hike council tax by the most it is allowed to do as it faces rising costs for its most vital services and looks to bolster its reserves.

Devon County Council’s cabinet approved the budget proposal that will see the council ask to increase council tax by 4.99 per cent, taking a Band D property’s bill to £1,891.

That includes a 2 percentage point increase for adult social care, the department that is the biggest draw on the council’s cash at more than £395 million out of its more than £839 million service budget for the forthcoming financial year.

The budget proposals, which include adding £18 million into the council’s reserves, now have to go before full council next week to be ratified.

Councillor James Buczkowski (Liberal Democrat, Cullompton), the cabinet member for finance, said the council was only spending what it was getting in through income, and was not using reserves or borrowing to fund its day-to-day spending.

But Cllr Buczkowski said while he welcomed the government’s three-year funding settlement, which gives councils like his more visibility, there was an increasing reliance on council tax.

“Council tax is regressive and it was never designed to fund something as complex as adult social care or children’s services,” he said.

“The pressure is national in nature and should not be loaded onto local residents.”

He added: “If we don’t increase council tax, then the funding gap would fall on service reductions and that’s unfair.”

Cllr Buczkowski said the government has claimed Devon’s so-called ‘core’ funding is rising, but that rise assumes councils increase council tax by the most amount they are allowed to, and collect 100 per cent of it, which it is believed no council achieves. He said increase in funding from government was only around £900,000.

He noted the proposal to increase council tax by 4.99 per cent was “not taken lightly”.

Cllr Buczkowski said the plan was to put £18 million into reserves to help bolster its rainy day fund, a pot that has dwindled in recent years. The council had £222 million of reserves in March 2021 but this fell to £125 million at March 2024 and remains at a similar level now.

Devon has recently had a major boost as part of a national announcement whereby the government will pay off 90 per cent of its overspend on special educational needs and disabilities (SEND).

That is due to hit around £221 million in April, but Devon is expected to have about £194 million of that paid off.

Cllr Buczkowski was keen to stress the cash was clearing a deficit, and so did not mean the council now has more money to spend.

He added that £41.7 million that the council had been keeping to one side as part of the Safety Valve agreement – an initial mechanism aimed at helping councils rid themselves of SEND overspends but which has now been scrapped – will be moved into another reserves pot.

It is likely some or all of this cash could be required to pay off the 10 per cent of its SEND overspend that Westminster isn’t covering.

Once again, adult social services and children’s services make up the lion’s share of the day-to-day spending at County Hall. The pair are set to cost more than £660 million in the 2026/27 financial year, nearly four-fifths of the service budget.