AN ANNUITY to Okehampton Town Council has been declared 'illegal' leaving parishioners to pick up the tab for the £8,000 shortfall in the council's income this year.

The annual allowance from Okehampton United Non-Ecclesiastical Trust came to light when the Charity Commissioners were looking into updating the charity's constitution.

No action is being taken by commissioners but town clerk John Winchester said it was a possibility that councillors and members of the trust could have been surcharged for the money.

'It has been deemed illegal but because it was done in all innocence nothing is going to happen,' he said.

Four sevenths of the interest earned on Okehampton United Non-Ecclesiastical Trust's investments, which consist of land left to the town by various persons, has been paid to the town council for many years.

Mr Winchester said he believed it dated back to the 1970s when the old borough council became a town council.

The trust's constitution said the money should be used for charitable purposes to benefit of the whole community.

Mayor Christine Marsh said the council in its wisdom had put the money into its general pot because it felt this was being done for the good of the town.

'It was misconstrued somewhere along the line,' she said. 'This money had kept the precept down over the years.'

She said the town would not lose out on the money but would get it in other ways. It would be allocated by the Okehampton Non-Ecclesiastical Trust in the future.

The anomaly came to light after the budget for the year 2000/2001 was set by the town council's finance committee.

At a meeting of the full town council on Monday night Cllr Marsh warned members that if the problem of the £8,000 was not addressed now, next year the council could be facing an even bigger problem.

Cllr Sylvia Westlake said the expenditure should be reduced so the burden would not fall on the taxpayer which was 'totally unacceptable' and it was suggested cuts should be made to the £12,000 contingency fund.

The council was told that among other things the contingency fund was there for any legal costs incurred by the council and for a parish poll on the possible relocation of the war memorial should it be requested by the public.

'If this contingency fund is not spent it will be carried over to the next year anyway,' said Mr Winchester.

Councillors agreed they had 'little choice' but to add the £8,000 to the precept which will add between £3 and £4 to the average bill for a Band D property.

The town council's part of the council tax bill will amount to £54.58 for an average Band D property, an increase of 34 per cent — last year it was £42.35.

After the meeting, Cllr Marsh said Okehampton was not the only town that had increased its precept.

'A lot of towns have gone the same way and have increased their precept by a bigger percentage than we have,' she said.

The town council's major project this year will be refurbishing the Market Hall to which it has allocated £9,000. Match funding for the scheme has been approved by Leader II and the Rural Development Agency.