Mid Devon’s budget gap widens

The loss of a grant for rural councils and higher employment costs are among the key issues

Mid Devon District Council is facing a potential budget shortfall double that of what it previously expected.

Because of changes to government funding, a possible £450,000 gap could arise in what is called the ‘general fund’ – up from an earlier estimate in December of just £191,000.

The drastic change has been caused by alterations in the money the council receives from central government.

While Mid Devon is receiving more money via some grants, its loss of the rural services delivery grant – which was more than £633,000 – is larger than the increases put together.

Another key concern relates to how much councils will be compensated for the rises in National Insurance (NI) contributions that employers have to pay.

In last year’s budget, chancellor Rachel Reeves increased NI from 13.8 per cent to 15 per cent from April, and lowered the point at which it starts being paid to £5,000 from the previous level of £9,100.

This now means employers have to pay national insurance for many more part-time employees.

Mid Devon said it believed the changes to NI would cost it roughly £370,000 and that it expected to be compensated for around a third of this by the government.

The council’s cabinet will review the updated budget report next Tuesday. It will be asked to approve increased charges for some of its services, including those related to waste,  with the cost of a 240-litre bin rising from £70 to £72; increased land search charges related to planning; increases in some bereavement services. The cost of burying an adult coffin could go up £35 to rising to £1,495.

The cabinet report says work is still ongoing to finalise financial details so they can recommend a balanced budget to February;s cabinet meeting.