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Council Business

SHDC – Financial Update

District Council balances its budget while continuing to support South Hams residents

Published: 16 February 2023

outh Hams District Council has laid out its plans for how it will cope with the financial challenges of the year ahead, while doing everything in its power to help vulnerable people through the cost of living crisis.

On 16 February, the Full Council heard proposals on how the authority would set a balanced budget for 2023/24. To balance the budget of £11.7m, the Council has identified £2.4m in savings and additional income. However, the Council is still forecasting a £0.3m budget gap by 2024/25.

Councillors agreed to a small increase in Council Tax of £5 per year, amounting to an increase of less than 10p a week. This means a Band D property would pay £185.42 next year (2023/24) to the District Council for all of its services.

Recent changes to Government funding means the Council no longer receives any Government grant (Revenue Support Grant), a loss of £4 million per year, so the Council has to be self-sufficient to fund all of its services.

However, the Council continues to face considerable financial challenges as a result of uncertainty in the wider economy and constraints on public sector spending.

A difficult few years, with the COVID-19 pandemic and rise in energy and fuel costs have put added pressure on the finances of councils up and down the country, including South Hams District Council.

Strong financial management over many years and the continual drive for efficiency has enabled the Council to accommodate service pressures while still maintaining a low level of council tax. The Council has continued to work in partnership with West Devon Borough Council which has allowed South Hams to achieve annual savings of £3.9 million and more importantly protect front line services.

The Council has taken a hard look at where it can save money to keep balancing the books.

The budget agreed will leave the Council on a stable financial footing and will help the Council manage the uncertainty of the future reforms of Local Government finances, which are increasingly stretched.

Through the Council Tax Reduction Scheme, South Hams District Council will ensure that those in financial hardship are able to pay less Council Tax, and receive the full range of support services.

At the moment, the Council is supporting 4,900 households and has awarded £5.6m to reduce residents’ bills through the Council Tax Reduction Scheme. To help prevent further worry, financial advice is also given.

The Council continues to do everything it can to ensure that residents, businesses and front-line services come first.

Along with the main services that residents already know about, there are many others they may not be aware the Council provides. Those that help to protect residents’ wellbeing and the District’s economy to help keep the South Hams a beautiful place to live, work or visit.

The Council declared a housing crisis in September 2021 and backed its declaration by a 12-point action plan. Today the Council unanimously agreed proposals for second homeowners to pay a fair share of Council Tax. The proposals agreed would see second homeowners paying double the Council Tax amount for an area. This would become effective from 1 April 2024 at the earliest.

Cllr Judy Pearce, Leader of South Hams District Council, said: “Today, Council have agreed to increase Council Tax by £5 for next year.

“While any increase is regrettable, particularly during a cost of living crisis, it is right that we raise Council Tax by a small amount to ensure that we can maintain and improve our core services to everyone across the district, especially those most vulnerable. We’ve been working very hard to help people through the cost of living crisis and the support that South Hams District Council provides will be vital in the months ahead for many people.

“The Council runs crucial services for those in need, including housing and benefits services. Our Council Tax Reduction scheme ensures that those in financial hardship will pay less Council Tax, but get the full range of support services.”

“These are only some of the very many services that the District Council offers for less than one tenth of the annual Council Tax bill. The Council offers real value for money, with only 8p of every £1 paid (8%) in Council Tax being received by South Hams District Council to pay for their services.”

The District Council is also responsible for the collection of Council Tax on behalf of a number of other authorities, including Devon and Somerset Fire and Rescue, Devon and Cornwall Police, the county council and town and parish councils.

It is often assumed that all the money collected goes to the District Council, but that is not the case, as although the district council collects the Council Tax, the majority of the money is paid over to these other authorities, to fund their services.

To find out more about the report presented at the Full Council meeting, go to:


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