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Recently councillors from South Hams District Council have been analysing how much money they have to spend in the next financial year and setting their priorities for how they would like to spend it. But with their revenue support grant cut to zero from next year, this is not proving to be an easy task.
Over the last few years, South Hams District Council has seen a large reduction in the amount of money that it gets from central government. The District Council has known since last year that, from 2018, it will no longer receive a revenue support grant. In 2009/10 the Council received £5.5 million in Core Government funding (Revenue Support Grant plus funding from Business Rates) and by 2019/20 this has been reduced to £1.5 million – a reduction of £4 million. In addition to this, there are many other factors working against the council, such as inflation and possible public sector pay increases.
This means that from next year, South Hams District Council will need to find additional money to continue delivering the same services that it does now. With or without the predicted £0.5 million that could be saved by creating a new council, councillors are being asked to make some tough decisions that could lead to service cuts or increases in charges.
Councillors have been looking at this shortfall and deciding how they are going to cover it for next year. In 2018/2019 the budget gap for the year will be just under £0.6 million and by 2020/2021, it predicts that the yearly budget gap will have increased to £0.8m.
Cllr Simon Wright, Deputy Leader and Executive Member for Support Services said: “As we have been saying for some years, we simply do not have enough money to continue delivering the services at the same level as we do now. Our revenue support grant is stopping completely next year, inflation is going up and the public sector pay freeze may be relaxed. This means that we are having to look very closely at the other income we get and work out how we can cover the shortfall.”
District councils receive money to pay for services from three different sources – grants from central government, 6% from business rates, and charges for services such as carparks.
Cllr Wright continued: “Even if we do submit a proposal to the Secretary of State to create one new council and increase council tax, the benefits would not come into effect until 2020.
“In the meantime, the books need to be balanced for next year. The reality is that we have to look closer at our spending now and we may have to increase some of the charges on some of the services we provide such as carparks and public toilets, or stop doing things that that law does not requires us to do.
“An average band D home owner pays us, South Hams District Council, £155 a year, or £3 a week for the services that we provide. Without grants from central government to bolster this figure, it really is no wonder that we will be struggling to provide the basic services when our grant stops.”
At a series of budget setting workshops, councillors from South Hams have been looking at the services that the District Council provides and beginning to ask themselves some tough questions.
Cllr Wright continued: “We may be tinkering around the edges of this in order to balance the books next year. If we do not take some tough decisions, like the One Council proposal, or come up with other ways to generate an income, there may be some tougher decisions to come.”
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