Big spending cuts loom at East Devon District Council
PUBLISHED: 10:44 23 June 2010
JOB losses and a swingeing review of all services are necessary to stop East Devon District Council's deficit from spiralling to £3.6 million.
That was the stark message delivered to Honiton Town Council by the district authority’s chief executive, Mark Williams, and corporate director Diccon Pearce.
“We can’t continue like this, taking money from reserves,” Mr Pearce said. “We are faced with making massive cuts.”
He revealed the council is dipping into its reserves to meet a shortfall in funding.
The deficit for the current financial year is estimated to be £592,000.
However, it could rise to £1.75 million, or even higher, by 2013, if no action is taken.
The council has £14 million in reserves but will struggle to maintain its current level of services now that the Government has announced a freeze on council tax.
“Income streams are drying up and our reserves, while they may look healthy, will go quickly if we don’t take action,” said Mr Pearce.
“What if council tax is frozen for two years? We could see a five per cent reduction in grants over the next five years and that could leave us with a deficit of £3.6 million.”
Mr Pearce admitted: “We are reviewing our priorities. There is no magic wand.
“We will reduce our range of services and look at making savings, and work with partners.”
Goods and services will both come under the spotlight during a review.
“We have to remain customer focussed, but cut out waste,” Mr Pearce told the council’s June meeting.
“We will look at the assets we hold and also use technology to reduce staff and the amount of paper circulated in the building (Knowle).”
Mr Pearce asked councillors: “If you can do things better than us, can you pay for these services?”
Honiton Town Council could take on some of the district’s local responsibilities – even the running of car parks. But, if council tax is frozen, it, like the district authority, will not have a way of raising its income to cover the cost.
Deputy mayor Councillor Vernon Whitlock made the point. “If the town council is not in a position to raise its precept, how can we take on any of these services?”
Town and district councillor Peter Halse said: “We are faced with a very serious situation.” He attacked a report compiled by the council’s rationalisation panel, saying: “It is as wet as wet can be.”
Councillor Halse dismissed claims that cutting use of paper would lead to a huge saving.
And predicted the district council needed to save as much as £5 million. He estimated that reducing the amount of paper used at the Knowle would only shave £100,000 off expenditure.
Mark Williams said: “It is early days for the rationalisation panel. There have been some suggestions put forward by council officers.”
Mr Williams said, he believed, the new coalition government “has made a good start”.
He hoped restrictions would be imposed on what the Audit Commission can demand from councils, offering a potentially huge saving for East Devon District Council.
Honiton Town Council’s policy committee is to discuss prioritising of services.