RATEPAYERS in West Devon are to get a refund in their bills after the borough council agreed this week to set a new budget for next year.

The financial rethink comes after months of lengthy negotiations and finally a meeting with top officials at the Department of Environment during which councillors and officers managed to navigate their way through a loophole in the complex tax laws.

Lesley Halton, borough treasurer, said: 'My finance team and the chief executive came with me to London where we actually presented them with loads of documents — it's very technical.

'We also had John Burnett, the MP, working behind the scenes to make sure they listened to us.'

Miss Halton said tax rates set by the borough earlier this year exceeded Government guidelines, mainly due to an increased demand from the parishes, most notably Tavistock — it upped its precept by almost 400 per cent because of costs involved in an ongoing legal action.

Consequently, the borough faced a £58,000 penalty tax.

Now, DETR officials have confirmed local authorities can spend their government standard spending assessment increase without incurring penalties.

'We can avoid that penalty tax and exploit this loophole,' said Miss Halton.

She said if the borough adds its SSA increase to the government guideline figure for West Devon it comes very close to the budget already set without attracting the penalty tax.

And as a result of setting a new budget, councillors have also agreed a new council tax.

The new Band D rate will be £114.13 as opposed to the original level set in February of £117.96.

Ratepayers will be credited a repayment of £3.83 against next year's bills.

Miss Halton said high administration costs prevent the council from paying the refund immediately.

Cllr Peter Hill, chairman of the council's policy committee, said: 'We owe a great debt to our staff and our MP, who through his good offices enabled us to get hold of the people concerned at the DETR.

'It involved hard work and determination.'

Cllr David Stapleton said it was 'good news' — he hoped the DETR realised there should be 'some sort of flexibility' for authorities in 'exceptional circumstances'.

John Burnett, MP for West Devon and Torridge, said: 'I have discussed this with the minister of state and I am very pleased that central government has heeded the comments that West Devon Borough and I have made.

'It would have been grossly unfair to penalise West Devon ratepayers for events completely out of the borough council's control.'