TAVISTOCK business owners expressed concern recently at news that West Devon Borough Council was to set up a business 'to boost its finances'.

At a meeting of the chamber of commerce last week, members were told by treasurer Mike Harper that he had heard the borough council had agreed to set up a limited company offering its services.

He said: 'This is a new venture that West Devon Borough Council is looking to do. They have decided to become businessmen to boost their finances. I feel this sets a dangerous precedent going forward. My problem is that they would be using our council tax to fund the business and using officer and councillor time to run it.

'There is so much in it that scares me and not many people realise it has gone on.'

Guy Talbot felt that the Chamber, representing local businesses, should be able to give their opinion.

He said: 'The council is there to serve its electorate, not to make profit — that's for local businesses to do. This could potentially be a drain on rate payers and tax payers resources. I propose we strongly object to this.'

Other members agreed that it was unfair and a 'huge conflict of interest'.

Chairman Neal Taynton-Young said the borough council carried out surveys among businesses in the area and to have access to that kind of information as a start-up business would be 'invaluable'.

Member Kate Royston spoke in defence of the borough council.

She said: 'The council is here to serve us and they need money to do that. There should be an attitude of support towards this — perhaps we can turn it into a positive.'

Another member agreed by saying: 'There are plenty of councils around the country that make money for tax payers through setting up a business.'

The chamber agreed to invite the council to its next meeting in December to discuss the issue.

A spokesman for West Devon Borough Council said councillors agreed to set up a Local Authority Trading Company last month. The sole shareholders are West Devon Borough Council and its partner South Hams District council. The company would be 100% owned by the two authorities with no private shareholders. All profits generated would be reinvested to support frontline services.

The spokesman added: 'Over the last few years the financial landscape for local authorities has changed significantly with continuing reductions to many of the council's funding sources. The council has responded over the years with a range of initiatives, particularly through sharing services with South Hams District Council and more recently with our transformation programme which reduces our operating costs.

'However, the council needs to continually look at different ways of reducing costs, and secure additional income streams.

'An income generation working group has been meeting in West Devon to identify potential trading areas. Where opportunities arise, and subject to a suitable business case being in place, the councils hope to exploit potential opportunities and new trading areas as part of our ongoing approach to reduce costs, drive efficiencies and protect the services.'