Mid Devon takes £500k from its savings
Mid Devon has finally agreed its new budget, which will see the district council take more than half-a-million pounds from its reserves.
Ollie Heptinstall, local democracy reporter www.radioexe.co.uk
Officers were forced to reconsider the council’s financial plans after councillors last month rejected two sources of income needed to balance the 2023/24 budget – a legal requirement.
Mid Devon had been expecting to earn interest from loans it had made to its controversial housing development company, 3Rivers, but members rejected a new business plan for the firm, and its future is now in doubt.
The council was also short of an additional £120,000 after members paused planned hikes to car parking charges following a public outcry.
Some charges, including annual allocated permits, were set to more than double, but they are instead now likely to rise by inflation.
To ensure the council is not projecting to spend more than it receives in income next year, the majority of councillors approved a temporary reduction of £610,000 from its current general fund reserve at an emergency full council meeting on Wednesday [8 March].
The move, agreed three days before councils must legally set balanced budgets, will take the reserve down to around £1.6 million – below the £2 million minimum level previously accepted by councillors.
Explaining the numbers, council finance chief Andrew Jarrett’s report said: “Due to the extremely tight timetable to make these final budget adjustments, it is fundamentally impractical to offer any other budget solution except utilising our general fund balances/reserves.”
It adds the council will therefore need to agree a plan “as to how and over what period it will be replenished back to the £2 million figure that was agreed.”
Mid Devon’s overall budgeted cost of services next year is £16.8 million.
Councillors also agreed to take a further £15,000 out of reserves to prevent two paddling pools at Tiverton and Crediton from being mothballed, after hearing from disgruntled residents.
The pools will remain open this summer, though town councils and businesses may step in to help after that.
Mid Devon previously agreed to raise council tax by 2.99 per cent from next month, equivalent to an extra £6.56 per year for band D properties.