The proposal to form one new Council is one of several measures that the Councils are considering to help close the £1.9m funding gap forecast for 2020/2021. The other major measures that the Councils are currently considering are:
- Outsourcing some of their front-line services such as waste and recycling services (these are already outsourced in West Devon however the contract is coming to an end in 2019) or creating a company owned by the two councils to deliver some of these services
- Considering a programme of buying and renting out commercial properties which could lead to a regular income for the Councils by renting out the properties it has purchased. West Devon councillors recently voted to pursue this option whilst South Hams has decided to defer until the outcome of the One Council consultation is known.
These measures are being considered alongside each other as there is no single solution to the financial pressures faced by the Councils to meet the funding gap, and to ensure financial stability for the medium to long term. We can accurately calculate the positive financial impact the one new council proposal will make to the funding gap, this cannot be said of the other measures being considered.
A further option for the Councils is to reduce services or stop delivering some entirely. It is possible for the budget gap up to 2020 for both Councils to be addressed by stopping community grants, cutting some other discretionary services and reducing the frequency or quality of statutory services, as well as the significant use of reserves. However, these options are not sustainable and will not address the challenges in the medium to longer term from 2020 onwards. At present the two Councils share staff and the consequences of either Council failing to balance its budget would have a significant detrimental impact on the finances of the other leading to the need for increases in Council Tax as well as further cuts to services. Councillors believe that these services are important to the community and they are striving to maintain them.
Combined Assets and Balance Sheet for one new Council
Residents across West Devon and South Hams would benefit from the joint assets of each council, as well as needing to meet the costs and service the liabilities of each council.
If one new Council is created it would be the responsibility of the councillors elected to the new Council to decide how to use the existing assets and the current council offices at Follaton House and Kilworthy Park.
A single Council would have an Asset Base valued at over £95m. Below is a summary of how a new Council’s balance sheet could look, based on the 2016/17 Unaudited Statement of Accounts of both Councils: