WEST DEVON Borough Council will receive an extra £74,000 in government grant towards funding its services for the next financial year.

Council leaders this week said that while they were relieved the Government had kept its funding promise, the grant increase of just 1.7% went 'nowhere near' meeting the authority's cost pressures of more than £700,000 for 2010/11.

The money forms just a slice of the council's annual income and will have a bearing on council tax levels to be set in February 2010 for the next financial year.

As the recession continues to bite, the demand on council services has increased dramatically, while income from investments has dropped significantly.

Housing benefit and council tax benefit claims to the council have doubled over the last year — in the first six months of the last financial year, the council dealt with 797 new claims. For the same period this year, the number of claims has increased to 1,433.

The council's investments have been badly affected by historically low interest rates. In 2007/08, income from council investments realised just over £700,000 while this year it will be only around £100,000.

The council has found savings and extra income of more than £400,000 from its current £8.6-million net budget but is left with a shortfall of just under £300,000.

The council has a package of measures to help small firms, for example, hardship relief assistance, rural rate relief and small business rates relief. The authority is also striving towards paying small businesses for goods and services within ten days of receiving their invoice.

Cllr Mrs Margaret Garton, chairman of the council's strategies and resources committee, said: 'The Government is predicting council tax rises to be around three per cent, which would be the smallest rise for 16 years. Currently, it is too early to say how much West Devon's portion of the council tax bill will be.

'We are more than aware that personal and business budgets are tight and we will do everything we can to keep any council tax increases as low as possible.'