Since 2010 Local Authorities have had growing budget pressures and decreasing grants from Central Government. This position is looking significantly worse for the future given the recent budget settlements which see some government grants stopping completely from 2018.
To ensure that valued, local public services can continue to be delivered in the future, many Councils are looking at a range of solutions for addressing their budget gaps from outsourcing of services, establishing companies to deliver services to other councils and sharing services between councils.
The current budget gap forecast for 2020/21 is £1.1m for West Devon and £0.8m for South Hams, a total of £1.9m that needs to be saved across the two councils in order to balance their books for that year and beyond. Doing nothing is not an option and both Councils need an early plan for how they will address this funding gap.
While the Councils are also exploring a number of other options for closing the gap, forming one new Council is the only option for which we can provide firm figures that we are sure will contribute to closing that funding gap through generating up to £0.5m of savings a year and increasing income through Council Tax equalisation.
South Hams and West Devon already have a strong history of working together to achieve savings and deliver services in a more efficient way. This history of working together (from 2007) has culminated in a smaller, shared workforce delivering these services across both Councils whilst saving £6 million per year. The Councils want to continue to protect services and the savings already achieved. Creating one new Council is the next logical step in this journey. As a result of sharing their workforce, the Councils are financially dependent on each other; this means that if either Council were to fail to balance their budget, there would be a significant negative impact on the finances of the other Council.