East Devon District Council rate freeze agreed

DISTRICT council finance chiefs have rubberstamped a credit crunch-busting budget – with no increase in their slice of council tax for the coming year.

DISTRICT council finance chiefs have rubberstamped a credit crunch-busting budget - with no increase in their slice of council tax for the coming year.

But, to pay for standstill tax, they could have to draw on �2 million of council reserves.

At a meeting on Wednesday, East Devon District Council froze rates, making them the lowest in Devon.

From March, council tax bills for 2009/2010 are expected to start dropping through letter boxes.

The bills will cover EDDC's share (standstill) as well as Devon County Council's slice (2.89 per cent rise) plus the cost of parish and emergency services.

In real terms, EDDC's share will equate to a typical Band D council tax payer footing �118.24 a year - or �2.27 a week.

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Miss Sara Randall Johnson, EDDC's leader, said: "Nobody is immune to the effects of the credit crunch.

"But, at times like this, we all need to help each other - which is why we have worked out a way that we can make no increase."

But she warned that precepts - the share required by parish, town councils, the county council and emergency services - could still mean higher bills.

She said: "The combined council tax bill ...may still go up - due to charges made by others. But people will pay the same in 2009-10 for services provided by EDDC as they did last year.

"...East Devon proposes to lead the way ...and show how it is possible to manage resources in such a way that services can continue to be delivered without hitting hard-pressed residents in the pocket.

"There are people out there who have lost their jobs; there are families who are struggling to make ends meet; and there are pensioners who are seeing their hard-earned savings bringing a smaller return as the interest rate plunges.

"This budget is for them."

She added that, due to 'prudent' budgeting, they had reserves which they were using to keep charges down.

But the Lib Dems said that �2 million of reserves was too high a price to pay - and the policy could affect future services.

Cllr Derek Button, who voted against the freeze, said: "There is, unquestionably, a time for...(protecting)...council tax payers from over-large increases.

"(Previously) this council has ridiculed any such proposal by saying such things as 'you are mortgaging our future'...

"Well, all those arguments apply now. The only difference is the magnitude of the proposed use of reserves. A full �2m in this one year."

He asked: "Do you intend to drastically cut services? Do you intend to dramatically cut the capital budget?

"Whatever course you take, you will, sooner or later, have to spell out to the electorate what services will go and what capital projects face the axe.

"No one could call this a prudent budget. No one could call it a progressive budget. It's a botched budget cobbled up in difficult times.

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