West Devon faces funding squeeze

The leader of the smallest district authority in Devon claims the government is going to “squeeze” rural councils until they “bleed dry” as it presses ahead with local government reorganisation.

However, Cllr Mandy Ewings (Ind, Tavistock South West) issued a rallying call to members of West Devon Borough Council, urging them to continue doing their best with the finances they have for the time being.

The government is looking to abolish the two-tier system of district and county councils in Devon in favour of unitary councils covering larger geographic areas. These may be overseen by a mayor covering a strategic authority for Devon and Cornwall.

Exeter City Council is bidding for unitary status by incorporating parts of East Devon, while Plymouth, which is already a unitary authority, hopes to extend its boundaries into the South Hams.

However, how the rest of Devon will be governed remains unknown, and district councils have begun discussions on possible mergers.

With a population of 57,000, West Devon would need to join with several other councils to meet the population size set by the government for a new unitary authority.

There is some flexibility on the 500,000 population rule, but only if areas can present a strong case demonstrating their potential for growth.

West Devon’s Overview and Scrutiny Committee was told this week that rural councils are receiving “very little” of the new ‘recovery grants’ issued by the government to support local services.

The government claims it wants to “start to correct the unfairness of the current system” and “lay the foundation for future reform” with a new £600 million recovery grant. This funding is being allocated based on deprivation levels, population size, and local revenue-raising capacity.

Deputy Chief Executive of West Devon Borough Council, Steve Mullineaux, said it is “crystal clear” what direction the government is heading in, noting that metropolitan authorities like Liverpool and Manchester have received the most funding, around £20 million or more. In contrast, West Devon received just £63,000.

The rural services delivery grant, previously worth £600,000 to the council, has been withdrawn by Labour. However, the authority will make representations to the government about the cost of providing rural services in an attempt to have the grant reinstated as part of its funding settlement for the next financial year.

The committee was told that the council is likely to face a £1.6 million budget gap in 2026/27.

Mr Mullineaux said he is more pessimistic about funding than at any point in his 10 years at West Devon.

He added that he does not expect local government reorganisation to impact West Devon for at least two years.

However, he warned: “This is residents’ money, and we have to make sure we carry on delivering services until someone shuts the light off and says goodbye West Devon.”

Cllr Ewings said: “The government is going to squeeze rural authorities and keep squeezing them until we bleed dry.

“But we have to continue our day job of looking after communities and residents. If we are going to have to hand over the keys, we want to leave the council in the best possible state.

“Where we can make improvements for our communities, we all want to be able to say, ‘I did my best for my ward while we were still here.’”

Since 2010, West Devon’s core funding has been reduced by £3 million under the Conservative and Coalition governments. The council now receives just £112,000 in central funding to run services.

By sharing a workforce and some services with South Hams District Council, it has saved £2.2 million per year, with combined savings of more than £6 million.

For 2025/26, councillors have agreed annual budget savings of £1.7 million. This includes salary savings, such as scrapping a vacant assistant director of planning role, as well as generating more income from services and business rates.

The largest grant received by the council from the government is the new Extended Producer Responsibility (EPR) grant, worth more than £1 million, to manage packaging waste.

The New Homes Bonus will continue this year at £216,000 but is expected to be discontinued thereafter.

Garden waste collection charges, which currently raise £70,000, are proposed to increase to £65 per household per year from April.

Council tax accounts for 60–70 per cent of West Devon’s funding. The Overview and Scrutiny Committee has supported a council tax rise of 2.99 per cent, the maximum allowed without a referendum. The final decision on council tax and the budget-setting process will be made by the full council in February.

Committee members also agreed that £80,000 from the second homes council tax premium should be reserved for providing more affordable housing.

The council’s earmarked reserves currently stand at £11 million, while unearmarked reserves are at £1.7 million.