THE financial settlement from central Government to district councils for the coming year was this week slammed by council leaders in West Devon.
The borough council will only receive an extra £64,000 in government grant towards funding its services for the next financial year.
Council leaders this week said that the grant increase of just 1.5% — 3% less than the current rate of inflation of 4.5% (Retail Price Index) — goes nowhere near meeting the authority's unavoidable cost pressures of more than £700,000 for 2009/10.
To put the grant increase into perspective, inflation alone on the council's waste and street cleaning services is expected to be around £70,000 for 2009/2010.
Cllr Margaret Garton, chairman of the council's strategies and resources committee, said: 'These are tough and difficult times when every family, business and organisation has to tighten their belts. We were hoping that the Government would give us more money in light of these unprecedented events.
'In real terms, when you look at the inflation figures, this is a cut in grant for the borough. It's nowhere near enough to deliver the services that local people rightly expect and deserve. How can we help to sustain our rural communities when money is being drained away?
'The council will be working hard over the next couple of months to help residents and businesses who are struggling to make ends meet, whilst ensuring we still deliver quality services and keep council tax as low as possible.'
The council has already found savings and extra income of more than £200,000 from its current £8.1 million budget.
But, following the latest announcement on its grant, the council is still left with a shortfall of around £400,000.
The shortfall and the increasing demand for the council's homelessness and housing benefits service due to the turbulent economy means the authority's finances are being stretched to the limit.
As homeowners and businesses are suffering, demand is increasing on the council for services to help them, with rising costs.
The council has a package of measures to help small firms through these uncertain times with, for example, hardship relief assistance, rural rate relief and small business rates relief.
The authority will also strive towards paying small businesses for goods and services within 10 days of receiving their invoice.
West Devon is one of the most sparsely populated districts in the country with a population of just over 50,000, yet it serves an area equivalent to the size of Greater London. The authority is the smallest staffed district council in the country.
The impact of its small population means that the council's capacity to raise income is limited. An extra one per cent increase in council tax only raises an extra £36,000.