South Hams District Council are having to carefully analyse their financial future-balancing funding cuts and service requirements.

Recently councillors have had difficulty deciding on their spending priorities for next year because their revenue support grant is being cut to zero.

SHDC have witnessed a significant reduction in the amount of money they receive from the central government over the last few years.

It has been known since last year, that from 2018, the district council will no longer be in receipt of a revenue support grant.

Back in 2009/10 Core Government funding provided the District Council with £5.5 million; however by 2019/20 this amount has been decreased to £1.5 million resulting in a reduction of £4 million.

Additionally, there are other factors working against the council including inflation and the possibility of public sector pay increases, which are collectively putting strain on the limited resources available to the council.

The money that District Councils receive for services comes from three different sources including grants from central government, 6% from business rates, and charges for services such as carparks.

Consequently, SHDC will need to find additional money to continue delivering the same services that it does now.

Regardless of the predicted £0.5 million that could be saved by creating a new council, councillors are having to deliberate over some tough decisions, which could naturally lead to service cuts or increases in charges.

Councillors have evaluated this shortfall to decipher how they are going to cover it for next year.

The budget gap for the year is predicted to increase to £0.8 million by 2020/2021 from just under £0.6 million in 2018/19.

Deputy Leader and Executive Member for Support Services, Cllr. Simon Wright 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.”

Cllr. Wright explained that even if the Secretary of State supported the proposal to create one new council and increase tax, “the benefits would not come into effect until 2020.”

“In the meantime, the books need to be balanced for next year…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 law does not require us to do.”

On average, a band D home owner pays SHDC £155 a year or £3 a week for the services they provide.

Consequently, without grants from central government, “it is really no wonder that we will be struggling to provide the basic services when our grant stops”, said Cllr. Wright.

“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.”