South Hams District Council says it is proceeding with caution in its budgeting for the next financial year due to uncertainty over future funding from central Government.

The budget, agreed at South Hams District Council’s full council meeting, sets out to “maintain frontline services, invest in the local economy and navigate the uncharted waters of uncertain government finances”, according to SHDC.

Councillors have agreed an increase of £5 a year on a Band D property. This makes the Band D council tax for South Hams District Council £165.42 for the year.

SHDC describes itself as being “in a strong financial position” but says it is planning for “more turbulent times ahead”.

Cllr Simon Wright, deputy leader of the council, said uncertainty over whether the council will continue to receive the Rural Services Delivery Grant is causing it a financial headache.

He said: “Four years ago the Government told us how much money they would give us every year for four years. 

“We have known since then that we would not get any more Revenue Support Grant. But the four year settlement did give us certainty that we would continue to get the Rural Services Delivery Grant, which is basically extra money because they recognise it is difficult delivering services in a rural area. 

“This agreement ends next year and we have no information about what money, if any, the Government will give us after that.

“It appears that they will be basing future funding figures on the number of people living in an area, and with so many second homes in South Hams, this could prove a real problem for us. We are currently lobbying government to recognise the increase in our seasonal population.”

In the light of this, the council is planning to “keep some money in reserve for an unpredictable future” but says it “remains committed to doing everything it can to support residents and businesses”.

SHDC said it “recognises that income generation and local investment will be key to keeping its finances healthy and services protected”.

The budget includes:

> An extra £80,604 from Government as part of its Rural Services Delivery Grant. This is just for one year.

> A programme to replace play park equipment across the District, with a budget of £190,000.

> A commitment to continuing to support the five year programme of repairs to the council’s coastal assets, worth £300,000 per year.

> A contract with FCC Environmental to provide waste, recycling and cleaning services that will save SHDC £286,000 this financial year.

> Improvements to the waste depot in Ivybridge and an increase in the amount of money the council is putting away for new waste and recycling vehicles.

> New business units in Ermington and improvement to existing units.

> Improvements to Batson Creek car park.

> Resurfacing of a number of car parks and resurfacing the South Devon Tennis Centre’s outdoor courts, which are owned by the council.

> Development opportunities to support the local economy and provide jobs.  Subject to obtaining planning permission, these include a hotel in Kingsbridge, a health hub in Dartmouth, improvements to the quay and new business units in Batson and beach huts at Beesands.  The council also approved a new commercial property strategy which will see it “consider prudent commercial investment within the district in the forthcoming year”.

> £3.9 m savings a year as a result of working with West Devon Borough Council.

Sophie Hosking, SHDC’s new chief executive, said: “Sound financial management has put us in a good position.  But as Cllr Wright has said, there remains some tough challenges ahead.  Next financial year we are still predicting a budget gap of £0.47m and we do not know what our funding from Government will be.  So there is clearly a lot of work to do.”