West Devon Borough Council has set a balanced budget and a council tax rise of 2.99 per cent.

Average households will pay an increase of £7.82 per year or 15p a week for the borough’s services, which is added to the amount set by Devon County Council, parish or town councils, the fire and police.

The authority said that prudent financial management over many years means it does not have to cut services.

But it is forecasting a £1.6 million budget gap by 2026/27, primarily because of a reduction in central government grants.

The withdrawal of a rural services delivery grant means the council will be £600,000 worse off annually and this year will be the last for the new homes bonus which is currently £215,000.

Council leader Cllr Mandy Ewings (Ind, Tavistock South West) warned of more government reforms in future.

But she said the council will still deliver projects such as the new Okehampton Railway Interchange in the forthcoming financial year. The council will also enter local government reorganisation with a balanced budget and services intact, something some other district councils would not be able to do.

“We are in precarious times,” she said.

Neil Jory (Con, Milton Ford) said long-term investments, investing in the revenue and benefits team, and raising money through renewable energy business rates brings in more than £600,000 a year.

He said more than £1 million had been received from government for extra responsibilities around waste management, which is income the council can make use of as waste services already meet new requirements.

He claimed in a normal year this would be “transformative” and could have resulted in a freeze or reduction in council tax, but changes in government funding prevent that.

“The council tax rise is just to maintain what we have. Uncertainty surrounding business rates income has left councils in financial limbo,” he said.

He continued: “The Chancellor’s increase in national insurance contributions has drastically raised our costs without full compensation and no guarantees beyond first year.

“I will  support this council tax rise because we must be responsible and plan for the future, but let there be no doubt the rise is a direct consequence of government policy and it is deeply frustrating that despite years of careful financial management, we find ourselves in this position.”

The council will ring fence £80,000 from doubling council tax on second homes from April, which equates to 11 per cent of the council tax.

It will open three temporary accommodation flats in Plymouth Road, Tavistock in the spring and has launched schemes to help preserve the area’s biodiversity.

On the streets, it has been cleaning up chewing gum mess, with equipment  bought using a grant from the Chewing Gum Task Force.

Energy efficiency schemes, decarbonisation of buildings and rolling improvement plans for public conveniences are also in the pipeline.