DEVON County Council has temporarily suspended the budgets given to councillors for local projects in their communities.

Opposition leaders have slammed the decision to halt locality budgets, which the council says will allow it to ‘review in-year expenditure and ensure future financial sustainability.’

The Conservative-controlled authority recently predicted a potential overspend in this financial year of up to £40 million, with a warning that it has ‘never before faced a combination of demand growth and price shock pressures of this scale.’

Unlike the government, local councils have to balance their budgets by law every year. Devon’s leader John Hart (Conservative, Bickleigh and Wembury) last week said: ‘We have a choice. We live within our means or we go bust.’

Each county councillor has an annual locality budget fund of £8,000, reduced this year from £10,000 which had been in place for many years. The cost to the council would be around £500,000 per year.

Members use the money to make grants to support activities that benefit the communities they represent.

The programme’s suspension means no new applications are being accepted, but the council will honour payments already approved.

Opposition leader Julian Brazil (Lib Dem, Kingsbridge) said he is ‘incredibly disappointed at the move.

‘This is a vital connection that the council has with its local communities and the money spent by the council is worth five or ten-fold when you take into account match funding and voluntary and community effort.

‘It’s very short-sighted. We weren’t consulted about it and the idea that we’re just going to support it is unacceptable.’

Cllr Brazil said other areas should be cut first, including senior management.

Leader of the Labour group, Cllr Carol Whitton (St David’s & Haven Banks) acknowledged the council’s financial problems but said they are due to years of cuts by central government. She urged the ruling Conservative administration at county hall to ask for support from Westminster.

‘Removing funding from local voluntary groups doing excellent work to plug funding gaps in our communities, however, is not the way to tackle the funding shortfall,’ Cllr Whitton added.

‘For very small sums of money these voluntary and community-based groups make a huge difference to people’s lives. Without these grants some groups may not be able to continue. Inevitably, this will hit those most in need the hardest.’

Independent leader Cllr Frank Biederman (Fremington Rural) also criticised the move, claiming ‘elected councillors have been excluded from the decision-making process.’

He added: ‘We all need to be briefed on the up-to-date position and to understand how the savings needed are going to be found. A proper debate needs to happen.

‘The locality budget saving is likely to be around £400,000 [this financial year] given some will have already been spent, so a massive impact on our communities but a small dent in the savings needed.’

Cllr Hart defended the cut. He said: ‘We currently face an unprecedented overspend of £40 million in the current financial year caused by the cost-of-living crisis, rising demand for our services for vulnerable children and adults and potential wage settlements.

‘We are currently looking at our budget line-by-line to see where we can be more efficient and effective and where we can make savings.

‘We are serious about cutting expenditure and balancing this year’s budget and working towards setting a balanced budget for 2023/24 in six months.

‘The locality budget is worth around half a million pounds and cannot be exempt from scrutiny. But this is a temporary suspension and we will honour payments that have already been approved.’

Last month’s financial report to Devon’s ruling cabinet, warning of the potential £40 million black hole, said: ‘Immediate action [is] being taken to safeguard the financial sustainability of the authority.’

A panel of senior officers is looking at options – work labelled as top priority. It could mean services are remodelled to save money and major building projects are delayed or cancelled.