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Council faces huge shortfall

By Exeter Express and Echo  |  Posted: January 10, 2013

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EAST Devon District Council has a budget shortfall of more than one million pounds to cover its costs in 2013/14.

Cabinet members considered a report at last night's meeting, Wednesday, January 9, which highlights actions required to bridge the gap.

In order to adjust and produce a balanced budget going forward for future years, a two-year budget period is required.

The actions outlined in the report range from minor savings which can be enacted upon now, for the 2013/14 budget, to a more fundamental process required to reshape the budget for 2014/15 and beyond.

Key areas affecting the finances of the council include the reduction of the formula grant pledged to local authorities by the Government.

Members heard how over the last two years the council has had a 26 per cent, or £1.8m, reduction in its formula grant.

The sum to be received in 2013/14 is estimated at £4.741m, a further reduction of £0.491m.

Over the year period the reduction amounts to £2.3m, or 33 per cent. Further reductions are certain until at least 2017/18.

Measures to be taken to address the imbalance include introducing council tax reforms in April.

This will include reducing the current second home discount from 10 per cent to zero so that second home owners are liable to pay 100 per cent council tax.

In addition, from April about half of business rate income will be retained locally.

In the draft budget, the council has agreed a council tax freeze for 2013/14.

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